SR 05:059 - Laserfiche WebLink

THE CITY OF 6G pL£ AShNTON cit Council Staff Report February 15, 2005 Finance Department SUBJECT RESOLUTION APPROVING THE FORM OF, AND AUTHORIZING THE EXECUTION AND DELIVERY OF, A PURCHASE AND SALE AGREEMENT AND RELATED DOCUMENTS WITH RESPECT TO THE SALE OF THE CITY'S VEHICLE LICENSE FEE RECEIVABLE FROM THE STATE AND DIRECTING AND AUTHORIZING CERTAIN OTHER ACTIONS IN CONNECTION THEREWITH STAFF RECOMMENDATION: Staff recommends that the Council approve: (1) the resolution authorizing the sale of the City's State VLF Receivable to California Statewide Communities Development Authority ("CSCDA") and (2) other related documents necessary to transact the sale. SUMMARY The State of California currently owes California cities $1.2 billion in Vehicle License Fee backfill revenues from 2003-04. The City of Pleasanton's share of this receivable is $1,136,257. As part of this year's budget agreement, the State is supposed to pay these funds to the City by August 2006, and the City has planned on using these funds as part of the General Fund's upcoming two-year budget. The CSCDA and the League of California Cities have established a bond program whereby CSCDA will purchase the cities receivable at a price between 90 and 95% of the receivable (the difference will be used to pay bond costs). In order to pay the cities, the CSCDA will sell a combination of taxable and tax-exempt bonds, with the State receivable serving as collateral. Based on the State's recurring budget problems and the possibility of continued delays in payment, staff believes it is prudent to sell the city's receivable and realize approximately 92% in March 2005 through the CSCDA program. Being able to invest the funds eighteen months earlier than anticipated mitigates the reduction in the receivable. The Resolution sets a minimum price of $1,022,000 (90% of the receivable) although staff anticipates the City will receive approximately 91-92% of its receivable. SR:05:059