The Sunset Empire Transportation District will take out a $400,000 line of credit to help cover operations in case the federal government shuts down again.

Transit agencies across the U.S. receive large portions of their operational budgets through reimbursements from the Federal Transit Administration, whose employees were furloughed throughout the government shutdown.

Sunset Empire, which receives more than half of its operational funding from the federal government, is missing about $185,000 worth of reimbursements covering September through December. The agency’s governing board had been looking at either drastic cuts to bus lines and employee hours or a loan.

“They were very adamant that they don’t want to cut service,” Jeff Hazen, the transit district’s executive director, said of why his board voted to accept the line of credit. “The district will have it in case there’s another shutdown.”

Hazen had previously warned that the bus agency would be out of compliance with state budget law if it spent its budgeted ending fund balance of $550,000 to cover operations. He walked back the statement Tuesday, but said the agency needs to keep the cash on hand to cover payroll and other operational costs as property taxes, timber taxes, federal reimbursements and other revenue comes in.

Whether Sunset Empire ultimately has to tap into the line of credit, which comes with a 5.5 percent interest rate for any money taken out, will depend on the approximately $143,000 in federal reimbursements it expects to receive each quarter. It should receive the outstanding reimbursements in the next 30 to 45 days, Hazen said.

“And if things are OK, we still have that line of credit,” Hazen said. “That can sit there as a revenue source if we have to use it.”


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