2011-12 Cross Fiscal Year TRAN
To address potential cash flow shortages through the end of the 2011-12 fiscal year, the Cash Reserve Program will issue a Cross Fiscal Year TRAN in late February 2012. The 2011-12 Cross Fiscal Year TRAN will provide funds to issuers that anticipate a cash flow mismatch due to the deferral of 2011-12 principal apportionment payments to 2012-13. Starting in July 2012, as the deferred principal apportionment payments are received by the issuer, the funds will be set aside toward the repayment of the 2011-12 Cross Fiscal Year TRAN. As state law requires that only revenues from the fiscal year that a TRAN is issued can be pledged for its repayment, the 2011-12 Cross Fiscal Year TRAN may not be used to address projected cash flow shortfalls in 2012-13. For these issuers, the 2012-13 Fiscal Year TRAN will be issued at the beginning of July 2012. Due to the combination of the timing of the apportionment deferrals and state and federal tax laws, many issuers participate in both the Cross Fiscal Year TRAN Program and Fiscal Year TRAN Program.
Key dates
- November 2011: Issuance resolution and board agenda package available
- November 2011 – January 2012: Adopt issuance resolution at board meeting
- December 2011: Provide financial data for TRAN sizing
- January 2012: Finalize cash flow projections for TRAN sizing
- Early February 2012: Sell TRAN to investors
- Late February 2012: Deliver TRAN proceeds for general fund cash flow use
2012-13 Fiscal Year TRAN
To address potential cash flow shortages through the first half of the 2012-13 fiscal year, the Cash Reserve Program will issue a Fiscal Year TRAN in early July 2012. Issuing a TRAN in the 2011-12 Cross Fiscal Year TRAN Program does not prevent a district from issuing under the 2012-13 Fiscal Year Program.
Key dates
- January 2012 Issuance resolution and board agenda package available
- February 2012 – April 2012: Adopt issuance resolution at board meeting
- March 2012 – April 2012: Provide financial data for TRAN sizing
- May 2012: Finalize cash flow projections for TRAN sizing
- June 2012: Sell TRAN to investors
- July 2012: Deliver TRAN proceeds for general fund cash flow use
The Program
The California School Boards Association proudly works with Piper Jaffray & Co. and Orrick, Herrington & Sutcliffe to provide the California Cash Reserve Program for school districts, community colleges, county offices of education and community college districts.
School districts, community college districts, and county offices of education are often faced with the difficult situation of having to fund regular monthly expenditures with irregular receipt of state aid and property tax revenues. These imbalances are typically caused by the uneven or "lump sum" receipt of revenues (e.g., twice a year property tax receipts as compared to regular monthly expenditures) and the deferral of state apportionment payments.
Celebrating its 24th year and more than 5,500 TRANs issued, the Cash Reserve Program is a [leading] cash management tool designed to supplement issuers’ general fund cash reserves for the fiscal year and to act as a buffer for temporary cash flow needs. To create this reserve, a tax-exempt obligation (or TRAN) is issued.
Proceeds from the sale of a Cash Reserve Program TRAN issue may be used to fund imbalances caused by the mismatch between revenues and expenditures. This program meets cash flow needs of schools in a cost-effective, efficient manner.
Contact Piper Jaffray & Co.
2321 Rosecrans Ave., Suite 3200
El Segundo, CA 90245
(800) 876-1854
(310) 297-6000
Fax: (310) 297-6001
Mark Farrell
Managing Director
mark.j.farrell@pjc.com
