CSAC and the League have been in meetings with the Department of Finance and the State Treasurer’s Office to work out amendments to the Proposition 1A repayment/securitization legislation (ABX4 15) to ensure timely and efficient bond issuance. We expect to have consensus amendments ready to go when the Legislature reconvenes on August 17.
Click here to see a flyer from California Communities explaining the program and providing a link to obtain more information.
Under ABX4 15, the first installment of property taxes would be transferred to the Supplemental Revenue Augmentation Fund by January 15, 2010. It is our goal to issue the bonds with which to purchase the Proposition 1A receivables by the end of November, thereby holding local agencies harmless from the impacts of the loan.
On or before September 28, 2009, the Director of the Department of Finance must establish a rate interest at which the state would pay a local agency that did not sell their Proposition 1A receivable to California Communities. This rate must be higher than the current Pooled Money Investment Account rate, but no higher than 6%. Based upon the setting of that rate, counties will be able to determine whether or not they want to hold the receivable as an investment or participate in the pool to sell their receivable at 100% of value. The state will pay the interest on bonds, plus the cost of issuance meaning the funds will be available to counties without discount. Counties will have a window of about 30 days to make that decision, likely required by the end of October 2009.
CSAC will continue to keep you apprised of any and all developments on this issue. In the meantime, if you have any questions, please feel free to contact me or Jean Hurst directly at jhurst@counties.org or (916) 327-7500 Ext. 515.
Paul McIntosh
Executive Director
California State Association of Counties
pmcintosh@counties.org
www.csac.counties.org