COUNTY OF RIVERSIDECOUNTY OF RIVERSIDEOFFICE OF THE AUDITOR-CONTROLLEROFFICE OF THE AUDITOR-CONTROLLER

Tax and Revenue Anticipation Notes (TRANS)

Alma Avila, Senior Accountant

April 21, 2005

ObjectivesObjectives

• Describe TRANS.• Explain the benefits of TRANS.• Provide an overview of the TRANS process.• Outline the Auditor-Controller’s role.• Outline the department’s role.• Open forum/questions.

Description of TRANSDescription of TRANS

• Tax and Revenue Anticipation Notes.• Issued by local governments.• Finance short term cash flow deficits.• Due to irregular receipts.• Fund ongoing operations.

Benefits of TRANSBenefits of TRANS

• An inexpensive method of financing short term cash shortfalls.

• Ability to produce additional income through arbitrage earnings.

TRANS SummaryTRANS Summary

FY2003-2004 TRANS Borrowing

Note Amount: $170,000,000

Note Repayment: (170,000,000)

Borrowing Cost: (153,000)

Interest Expense: (3,390,556)

Premium: 1,881,900

Investment Earnings: 2,630,287

Net Gain to County: $ 968,631

TRANS ProcessTRANS Process

• Permitted in accordance with Government Code 53850.

• Authorized by Board resolution.• Application filed to participate.• Financial advisors are employed.• Reviewed by debt rating agencies.

• Monitor General Fund (GF) cash.• Make projections for the following:

1. Current fiscal year ending cash balance.

2. Next fiscal year ending cash balance.

3. Next fiscal year’s lowest cumulative cash flow deficit.

• Recommend TRANS borrowing amount.

Auditor-Controller’s RoleAuditor-Controller’s Role

Department’s RoleDepartment’s Role

• Expedient handling of cash deposits.• Timely collection and recording of receivables.• Observe accounting practice and rules for

accruing revenue.• Proper posting of GF revenues and expenditures.

Department’s Role (continued.....)Department’s Role (continued.....)

• Monitor GF budget vs. actual.• Monthly reconciliation of accounts receivable and

accounts payable.• Amend budgets early in the year, when possible.

ACO ContactsACO Contacts

Alma Avila 5-3952

Jerry Wood 5-3574

aavila@co.riverside.ca.us