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Approve a resolution authorizing the transfer of up to 85% of FY2019/20 anticipated tax revenues from the Treasury Pool funds to local school districts as mandated under Article XVI Section 6 of the California Constitution from July 1, 2019 to April 27, 2020
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Published Notice Required? Yes ____ No _X _
Public Hearing Required? Yes ____ No _X _
DEPARTMENTAL RECOMMENDATION:
It is recommended that the Board of Supervisors approve a resolution authorizing the transfer of 85% of FY 2019/20 anticipated tax revenues from the Treasury Pool funds to local school districts under Article XVI Section 6 of the California Constitution from July 1, 2019 to April 27, 2020.
SUMMARY:
Various State mandates require the County, using available fund balances, or the County Treasurer, using Pooled Funds, to provide temporary funding to the local school districts in order to cover any cash deficits they may experience in meeting their operational requirements. The applicability of each mandate is dependent upon the type of district to be covered, the portion of time to be covered, and the availability of funds not immediately needed to pay claims against the funds.
The requesting of funds does not indicate an actual or anticipated revenue shortfall from the respective requesting district. Funding requests are intended to function as a temporary funding line of credit that the district may choose to access should they experience delays in the timing of anticipated funding.
The attached resolution will enable the requesting local school districts to fulfill their educational mandates by providing them with a stable source of available operational cash from July 1, 2019 to the last Monday in April of 2020, while keeping the County in compliance with all applicable mandatory statutes. Transfers will be payable with interest at the rate the County applies to funds of the districts on deposit with the County.
In accordance with Article XVI, Section 6 of the California Constitution, the County Treasurer shall make mandatory advances of up to 85% of anticipated property tax revenues accruing to the respective districts during FY2019/20 as needed. All advances will be repaid prior to April 27, 2020 as required by law, 85% of anticipated property revenues will be determined by the Auditor - Controller.
While the districts may not utilize an advance, Constitutional Advance funding requests for FY2019/20 are as follows:
Benicia USD 12,827,000
Dixon USD 4,000,000
Fairfield Suisun USD 25,800,000
Vacaville USD 19,686,371
Vallejo City USD 23,000,000
Total $85,313,371
FINANCIAL IMPACT:
The Constitutional transfers of funds will be made using cash available in the Treasury Pool. The Treasurer has determined that the temporary transfers of funds will not adversely affect the County Treasury Pool. There is sufficient liquidity in the Treasury Pool to fund these advances. The advances will be repaid from the first available revenues accruing to the district. The costs associated with preparing the agenda item are nominal and absorbed by the department’s FY2018/19 Adopted Budget.
ALTERNATIVES:
The Board of Supervisors could elect not to authorize the transfers of funds to the Districts; however, this is not recommended as the transfers are mandated should the districts require funding, and a failure to adopt the resolutions may cause the requesting school districts to be unable to meet their functional mandates and could place the County in noncompliance with State mandates.
OTHER AGENCY INVOLVEMENT:
The Auditor-Controller, County Counsel, County Administrator, Solano County Office of Education, and the respective requesting districts have been directly involved in this request. Formal transfer request resolutions from the respective districts are attached.
CAO RECOMMENDATION:
APPROVE DEPARTMENTAL RECOMMENDATION