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County Counsel recommending the Board decline to authorize the issuance of Tax and Revenue Anticipation Notes on behalf of the Lake Tahoe Unified School District, thus allowing the District to issue such notes in its own name.
FUNDING: N/A
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DISCUSSION / BACKGROUND
On numerous occasions over the past several years, at the request of various local school districts, the Board of Supervisors took action to allow those districts to issue Tax and Revenue Anticipation Notes (“TRANs”). (See Legistar Items 20-0805, 21-0154, 21-1018, and 22-1011.)
On June 14, 2023, County Counsel and the Treasurer-Tax Collector received a letter on behalf of the Lake Tahoe Unified School District (the “District”) notifying the County of its desire to issue a series of TRANs for Fiscal Year 2023-24 in the cumulative maximum amount of $7,000,000.
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 County Treasurer, and the County Audi...
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