Can school districts establish a revolving line of credit in their name?
No. Districts do not have the authority to borrow, except through bonds or capital lease agreements. Since a district does not have the authority to borrow, it may not establish a line of credit, which is a form of borrowing. However, the county may establish a line of credit for the district, with the county treasurer acting as the agent, subject to the provisions of A.R.S. 11-604.01. This line of credit should only be used to allow expenditures in budget-controlled funds when cash balances are insufficient.
