REPORT/RECOMMENDATION TO THE BOARD OF SUPERVISORS
OF SAN BERNARDINO COUNTY
AND RECORD OF ACTION
June 23, 2026
FROM
ARLENE MOLINA, Director, Preschool Services Department
MATTHEW ERICKSON, County Chief Financial Officer, County Administrative Office
SUBJECT
Title
County General Fund Loan for California State Preschool and General Child and Development Program Expenses
End
RECOMMENDATION(S)
Recommendation
1. Authorize a $2,905,000 loan from the County General Fund to the Preschool Services Department, to provide temporary funding of expenses for the California State Preschool and General Child Care Programs, pending reimbursement from the California Department of Education and California Department of Social Services, for the period of July 1, 2026 through December 31, 2026, with a repayment date of no later than January 31, 2027.
2. Authorize the County Auditor-Controller/Treasurer/Tax Collector to record the loan between Preschool Services Department and the County General Fund.
(Presenter: Arlene Molina, Director, 645-6478)
Body
COUNTY AND CHIEF EXECUTIVE OFFICER GOALS & OBJECTIVES
Operate in a Fiscally-Responsible and Business-Like Manner.
Provide for the Safety, Health and Social Service Needs of County Residents.
FINANCIAL IMPACT
Approval of this item will impact Discretionary General Funding (Net County Cost). The County General Fund unreserved balance will decrease by the amount of the loan; these funds will not be available until repaid. The Preschool Services Department (PSD) will repay the total loan of $2,905,000, plus interest, to the County General Fund no later than January 31, 2027. The interest amount will be calculated based on the County Treasurer Investment Pool rate and validated by the Auditor-Controller/Treasurer/Tax Collector (ATC). The loan interest is an allowable expense for the California State Preschool Program (CSPP) and the General Child Care Program (CCTR), funded by the California Department of Education (State) and the California Department of Social Services.
BACKGROUND INFORMATION
CSPP is a combination of State Preschool, Pre-Kindergarten, Family Literacy, and General Child and Development center-based programs. CCTR offers center-based early care and education services for children from birth through 12 years, as well as for older children with exceptional needs. These programs include both part-day and full-day options that provide a core class curriculum that is developmentally and culturally appropriate for the children served. The programs also provide parent education, referrals to health and social services for families, and staff development opportunities for employees. CSPP and CCTR services are provided to eligible children whose parents are working, attending school, or enrolled in job-training programs, and families referred by child protective services. PSD provides CSPP and CCTR services to approximately 1,114 children and their families throughout the county.
Revenue is received as reimbursements from the State after services have been rendered. Historically, the State has issued partial reimbursements on an inconsistent basis, which creates an insufficient cash flow to cover expenses. Since 2013, PSD has requested an annual loan from the County General Fund to ensure adequate funding for CSPP and CCTR expenses. Establishing the loan aids in maintaining federal compliance and allows PSD to pay for expenses incurred until reimbursements are received from the State.
On an annual basis, PSD completes an assessment of CSPP and CCTR revenue and then obtains Board of Supervisors (Board) approval to utilize Discretionary General Funding to provide the temporary funding needed, pending reimbursement from the State. The 2025-26 loan, authorized by the Board on August 19, 2025 (Item No. 37), was in the amount of $2,000,000 for the period of August 19, 2025 through December 31, 2025. PSD repaid this loan, plus interest, in the amount of $33,375.16.
The current loan request of $2,905,000 for 2026-27 temporary funding was calculated from a cash-flow analysis prepared by PSD. This loan amount will fund operations for six months pending State funding for the CSPP and CCTR programs. With approval by the Board, ATC will record the County General Fund loan and execute a cash transfer of $2,905,000 to PSD on July 1, 2026. PSD will repay the $2,905,000 loan, plus interest, to the County General Fund no later than January 31, 2027.
It is expected that PSD will continue to prepare a cash-flow analysis based on the State reimbursement schedule for each future fiscal year, and if necessary, request Board authorization for a loan from the County General Fund. The loan will temporarily fund CSPP and CCTR expenses pending State reimbursement and provide that federal grants regulations are met for a predetermined period. Per Title 2 of the Code of Federal Regulations Part 200, Subpart D, agencies must ensure federal funds have been used according to the Federal Statutes, regulations, and the terms and conditions of the Federal award.
PROCUREMENT
Not applicable.
REVIEW BY OTHERS
This item has been reviewed by County Counsel (Adam Ebright, Deputy County Counsel, 387-5455) on May 28, 2026; Auditor-Controller/Treasurer/Tax Collector (Mima Ugbo, Chief Deputy Controller, 382-3195) on May 5, 2026; and County Finance and Administration (Amanda Trussell, Principal Administrative Analyst, 387-4773, and Allegra Pajot, Administrative Analyst, 388-0218) on May 27, 2026.