Title
Exercise the Board of Supervisors option under California Government Code 53853 to notify certain school districts that it will not authorize the issuance of tax and revenue anticipation notes (“TRANs”) of the Districts and to provide such notification by February 8, 2013.
Report
RECOMMENDATION:
It is recommended that the Board of Supervisors:
Exercise the Board of Supervisors option under California Government Code 53853 to notify certain school districts that it will not authorize the issuance of tax and revenue anticipation notes (“TRANs”) of the Districts and to provide such notification by February 8, 2013.
SUMMARY AND DISCUSSION:
The State of California (the “State”) has deferred a substantial amount of funding for county boards of education, school districts and community college districts from fiscal year 2012-2013 to fiscal year 2013-2014 (the “Deferred Revenues”). This has complicated the cash flow management activities of those agencies. As a result, the districts are expected to participate in a mid-year cash flow borrowing program (the “Program”) sponsored by the California School Boards Association Finance Corporation to provide operating liquidity until the State disburses the Deferred Revenues in fiscal year 2013-2014.
The Program is structured to provide participants with economies of scale by reducing staff time and issuance costs incurred in TRAN borrowings. The TRANs are expected to be issued and pooled with some or all of the other participating Districts in the Program to secure the issuance of Bonds and or Certificates of Participation to be issued by the California School Cash Reserve Program Authority in one or more series.
California Government Code Section 53853 provides that County Board of Supervisors is to issue TRANs on behalf of the districts that have not been accorded fiscal accountability status. However, an exception applies to TRANs issued in conjunction with other TRANs. Under this exception, if the County Bo...
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