BARSTOW The Barstow Fire Protection District is preparing to take more than a quarter-million dollar hit to its budget due to California's recently passed budget-balancing measures.

The state passed two bills allowing it to borrow 8 percent of property tax allocations from local governments and special districts during the 2009-10 fiscal year. The fire district will be forced to loan the state $260,000. The state will take the transfer in two equal transfers on January 15, 2010 and May 1, 2010.

Barstow Fire Department Chief Darrell Jauss said the district has no plans to lay any employees off. He said the district only has two options to deal with the reduction in revenue: Use cash reserves and cutbacks to survive until the 2010-11 fiscal year or join with other local governments and districts in a bond program through the California Statewide Community Development Authority. The authority was founded in 1988 by the California State Association of Counties and the League of California Cities.

Jauss said the district has around $115,000 in reserves which could help offset the loan. He said delaying maintenance projects, cutting overtime and similar measures would allow the district to survive financially, but could would limit station staffing and only delay some costs to the future.

The district's other option is to sell its future loan repayment and interest to the California Statewide Community Development Authority. The authority would then begin selling bonds that would cover the amount of the loans the district and other local governments were forced to give the state. However, the district would not receive any of the interest from the state payback.

The district's board of directors has until the end of October to pass a resolution selling its debt to the authority, according to the report from the California State Association of Counties.

"The district is going to stay viable," Jauss said. "It's just unsure if we're going to absorb it and wait for the interest or try and get the money from the bond program. The state hasn't set the interest level, and the board has a lot to consider."

The state must repay all of the loans by June 2013. The repayment includes an interest charge that will be determined by State Finance Director Michael Genest at the end of September, according to a report by the California State Association of Counties.

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(760) 256-4126 or dheldreth@desertdispatch.com