Title
Chief Administrative Office recommending the Board decline to authorize the issuance of Tax and Revenue Anticipation Notes (“TRANs”) on behalf of various school districts, thus allowing those school districts to issue such TRANs in their own name.
FUNDING: N/A
Body
DISCUSSION / BACKGROUND
On June 1, 2020, County Counsel and the Treasurer-Tax Collector received a letter on behalf of various school districts (collectively referred to herein as the “Districts”) notifying the County of their desire to issue Tax and Revenue Anticipation Notes (“TRANs”) in the following specified maximum amounts:
• Black Oak Mine Unified School District ($2,000,000)
• El Dorado Union High School District ($10,000,000)
• Gold Trail Union Elementary School District ($1,000,000)
• Lake Tahoe Unified School District ($7,000,000)
• Rescue Union Elementary School District ($5,000,000)
TRANs are a form of short-term borrowing used to manage cash flow when revenues and expenditures are uneven over the course of a fiscal year. Though the notes may mature up to fifteen months after issuance, they are payable solely from the revenue received or accrued during the fiscal year within which they are issued. Additionally, such notes are limited to an amount up to 85% of the issuer’s estimated taxes to be collected, income, revenue, cash receipts, and other moneys available for making note payments.
The procedure to authorize issuance of TRANs is set forth in Government Code section 53853. It provides that, for school districts that have not been accorded fiscal accountability status, the notes may be issued by the Board of Supervisors. However, when the notes are to be issued in conjunction with other notes (i.e., pooled), then should the Board of Supervisors fail or decline to authorize issuance of the notes within forty-five days of receipt of the resolution from the requesting district, then the district may issue the notes in its own name. In that situation, the Board, the Count...
Click here for full text