TITLE
Recommendation to adopt resolution authorizing the issuance of Tax and Revenue Anticipation Notes in an amount not to exceed $60 Million; and authorize City Manager to execute all necessary documents. (Citywide)
DISCUSSION
The Tax and Revenue Anticipation Note (TRAN) is a cash management tool used by public agencies to fund cash flow needs during a fiscal year. It is typically issued at the beginning of a fiscal year and matures within 13 months. In no case may a TRAN be outstanding for more than 15 months. A TRAN enables public agencies that receive revenues sporadically throughout the year (e.g., property taxes, property tax in-lieu of Vehicle License Fees and property tax in-lien of sales tax) to have the cash on hand needed for expenditures while awaiting the receipt of these revenues. The City annually issues a TRAN and repays it within 13 months. During Fiscal Year 2007, the General Fund and Redevelopment Agency will experience short-term cash needs just prior to receipt of their first major property tax payments December, and the General Fund' s property tax in-lieu payments in January. To bridge this projected cash need , staff is proposing to issue a $54 million TRAN. The attached Resolution provides for the issuance of a TRAN in an amount not to exceed $60 millon. The $60 millon limit wil allow staff to adjust the size of the TRAN issuance in the event of unforeseen changes to the FY 07 cash flow and/or changes in market conditions. The TRAN will be competitively bid in early October through the use of an online bidding service.This item was reviewed by Assistant City Attorney Heather Mahood on July 13, 2006 and Budget Management Offcer David Wodynski on August 31 2006.
TIMING CONSIDERATIONS
The first property tax payments are due to be received from the County of Los Angeles on December 20, 2006 , and the property tax in-lieu payments on January 22, 2007. The TRAN proceeds will be needed prior to those dates. Once approved by the City Counc...
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