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Financing Related to Proposition lA Securitization Program <br />November 2, 2009 <br />The California Statewide Communities Development Authority (also known as <br />California Communities) is a joint powers authority that developed the <br />Proposition lA Securitization Program. The Authority issues bonds to <br />purchase Proposition lA property tax receivables from cities, counties <br />and special districts. The program enables local governments to sell <br />their property tax receivables and receive bond proceeds in two <br />installments (January and May 2010) equivalent to 100% of the local <br />agency's property tax reduction. The sale of the receivable provides <br />immediate cash relief, mitigates the risk to the City as local agencies <br />will have no obligation on the bonds, establishes the amount as debt for <br />the State in the financial marketplace and all costs of financing borne <br />by the State. Currently 1,178 agencies in California have enrolled in <br />this program. <br />FISCAL IMPACT <br />All transaction costs of issuance and interest associated with the <br />securitization program will be paid by the State of California. Approval <br />of the recommended action will generate an estimated $5.5 million in <br />revenue during fiscal year 2009-2010 and will be dedicated to addressing <br />the revenue shortfall associated with the suspension of local agency <br />revenue protection provided under Proposition lA. Funds from this <br />transaction will be deposited in the general fund revenue account <br />(account nos. 01102002-50011 and 01102002-50020). <br />APPROVED AS TO FUNDS AND ACCOUNTS: <br />Francisco Gutierrez <br />Executive Director <br />Finance & Management Services Agency ~ <br />55A-2 <br />