Title
San Diego County School Districts Tax and Revenue Anticipation Note Program, Series 2026A (Districts: All)
End
Overview
In the ordinary course of business, local governments and school districts may experience temporary cash flow shortage during the fiscal year due to a mismatch in the timing of the receipt of revenues, which is largely focused on the months surrounding tax payment dates, and ongoing payment of expenditures. To meet these short-term cash flow needs, school districts may need to issue a Tax and Revenue Anticipation Note (TRAN) to manage cash flow. Pursuant to Title 5, Division 2, Part 1, Chapter 4, Article 7.6, Section 53853 of the California Government Code, the County of San Diego (County) Board of Supervisors is authorized to approve the issuance of TRANs under the San Diego County School Districts Tax and Revenue Anticipation Note Program (Note Program) on behalf of participating San Diego County school districts (Districts), provided such approval is granted within 45 days of receipt of a request from the governing board of the respective District. This year, eight Districts determined that participation in the Note Program was necessary and have adopted the corresponding resolutions requesting participation, borrowing an aggregate amount not to exceed $195,750,000. Today’s recommendation is to support these eight Districts and allow the County to approve the Fiscal Year 2026-27 Note Program on behalf of the participating Districts.
Body
Recommendation by Chief Administrative Officer:
Adopt a Resolution entitled:
RESOLUTION OF THE BOARD OF SUPERVISORS OF THE COUNTY OF SAN DIEGO PROVIDING FOR THE BORROWING OF FUNDS BY CERTAIN SCHOOL DISTRICTS FOR FISCAL YEAR 2026-27 THROUGH THE EXECUTION BY THE COUNTY OF CERTAIN 2026-27 TAX AND REVENUE ANTICIPATION NOTES AND THE PARTICIPATION BY SUCH SCHOOL DISTRICTS IN THE SAN DIEGO COUNTY SCHOOL DISTRICTS TAX AND REVENUE ANTICIPATION NOTE PROGRAM
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Equity Impact Statement
Tax and Revenue Anticipation Notes are a vital financing mechanism for school districts in our community to ensure continuity of school operations. The proceeds from the bonds are used to manage temporary cash flow shortages during the fiscal year due to a mismatch in the timing of the receipt of revenues, which is largely focused on the months surrounding tax payment dates, and ongoing payments for expenditures. Without these bond proceeds, a school district may experience disruptions in their ability to provide valuable resources to their students in San Diego County.
Sustainability Impact Statement
Today’s action supports the Sustainability (Economy) Strategic Initiative in the County of San Diego’s 2026-2031 Strategic Plan by aligning the San Diego County School District’s available resources with services to maintain fiscal stability and ensure continuity of operations to help meet its sustainability goals.
Fiscal Impact
There is no fiscal impact associated with today’s action. The Series 2026A Tax and Revenue Anticipation Note (TRAN) will be obligations of the Districts participating in the Fiscal Year 2026-27 Note Program and will be payable from authorized revenues of the respective Districts, and do not constitute an obligation of the County of San Diego. The cost of delivering the Series 2026A TRAN will be the responsibility of the participating Districts. There will be no change in net General Fund cost and no additional staff years.
Business Impact Statement
N/A
Advisory Board Statement
N/A
Background
The County of San Diego (County) supports school districts that need to issue a Tax and Revenue Anticipation Note (TRAN) for cashflow purposes by approving the TRANs on their behalf, with the most recent Board of Supervisors (Board) approval occurring on August 26, 2025 (30). At that time two Districts participated (San Diego Unified School District and San Dieguito Union High School District) for a not-to-exceed principal amount of $120 million.
The participating Districts submitted a request to the County to approve the issuance of TRANs on July 29, 2026. If approved, today’s actions will grant the participating Districts’ request by allowing the County to approve the Fiscal Year 2026-27 Note Program on behalf of the participating Districts. Each note participant, i.e., each individual participating District, will be responsible for the repayment of its own note only. All obligations under the issuance are separate and distinct.
To carry out the Fiscal Year 2026-27 Note Program, County staff is working with the San Diego County Office of Education (SDCOE), which represents and organizes the various participant school districts. SDCOE provides a variety of services for 42 school districts and five community college districts in the County, including budget approval and oversight. At this time, it is anticipated that eight school districts within the County will participate in the Fiscal Year 2026-27 Note Program, borrowing a not-to-exceed amount for each participating District listed below:
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Districts |
Not-To-Exceed Principal Amounts of Notes |
|
|
Carlsbad Unified School District |
$25,000,000 |
|
|
Coronado Unified School District |
10,000,000 |
|
|
Grossmont Union High School District |
20,000,000 |
|
|
Julian Union High School District |
750,000 |
|
|
Mountain Empire Unified School District |
5,000,000 |
|
|
San Diego Unified School District |
100,000,000 |
|
|
San Dieguito Union High School District |
20,000,000 |
|
|
San Ysidro School District |
15,000,000 |
The proposed recommendation to adopt a resolution will authorize the Fiscal Year 2026-27 Note Program and will allow the County to execute the TRAN on behalf of the participating school districts. The adopted resolution will also approve the form of the legal and financing documents to which the County is a signatory, authorizing certain County officers to sign these documents.
Summary of the Series 2026A TRAN Forms Presented for Approval
The financing documents for the Series 2026A TRAN recommended for approval through the proposed resolution are:
Form of Trust Agreement. This agreement appoints a trustee to administer the Series 2026A TRAN. The County serves as a representative for the Districts and works with the Trustee, who works on behalf of investors, to administer the TRAN. The Districts must indemnify the County for losses arising from the County’s duties under the Agreement.
Form of Note Purchase Contract. The County acts as the issuing conduit under the Trust Agreement and Purchase Contract, and delivers the Official Statement and closing deliverables. Repayment of the TRAN is a responsibility of the participating districts, who pledge Unrestricted Revenues and must comply with other related post-issuance obligations.
Form of Preliminary Official Statement and Appendix A. This is the preliminary offering document related to the Series 2026A TRAN, and together with Appendix A, provides key financial and credit disclosure to potential investors regarding each of the participating Districts.
Form of Notice Inviting Bids. This document describes the parameters of the transaction and bidding requirements to the underwriting firms that will bid as a part of a competitive sale of the Series 2026A TRAN.
Linkage To The County Of San Diego Strategic Plan
Today’s proposed action supports the Sustainability (Economy) Strategic Initiative in the County of San Diego’s 2026-2031 Strategic Plan by supporting local school districts in their efforts to ensure continued provision of services to the students in San Diego County.
Respectfully submitted,
Ebony N. Shelton
Chief Administrative Officer
Attachment(s)
1. Attachment A-Resolution
2. Attachment B-Form of Trust Agreement
3. Attachment C-Form of Note Purchase Contract
4. Attachment Da-Form of Preliminary Official Statement
5. Attachment Db-Appendix A
6. Attachment E-Form of Notice Inviting Bids