Meeting_Body
FINANCE, BUDGET AND AUDIT COMMITTEE
FEBRUARY 14, 2018
Subject
SUBJECT: LOCAL RETURN BORROWING
Action
ACTION: APPROVE ADOPTION OF LOCAL RETURN BORROWING GUIDELINES
Heading
RECOMMENDATION
Title
APPROVE Local Return Borrowing Guidelines to establish procedures for borrowings secured by Proposition A (Prop A), Proposition C (Prop C), Measure R and Measure M Local Return (LR) funds as described in Attachment A. Approve incorporating the Local Return Borrowing Guidelines into the Guidelines for Prop A, Prop C, Measure R, and Measure M local return programs.
Issue
ISSUE
The California Public Utilities Code and the respective sales tax Ordinances/Measures permit Jurisdictions to issue debt secured by their LR allocation to provide for the financing of local transit needs, but is silent about how such borrowing is to be accomplished.
Discussion
DISCUSSION
The Board has approved borrowings that were secured by a Jurisdiction's share of Prop C and Measure R LR funds (see Attachment B). In order to facilitate Measure R LR borrowing, in 2013 the Board approved Measure R guidelines that codified the procedures previously used to accomplish borrowings. The proposed Local Return Borrowing Guidelines model those adopted for Measure R. Approval of this item will standardize the LR borrowing procedures for all four sales taxes, create consistency and equitable treatment of local Jurisdictions with respect to LR borrowing.
The Local Return Borrowing Guidelines reference three basic methods used to borrow against LR funds:
Method 1) Jurisdiction issues its own debt - only Metro local return
program/project approval required with little financing oversight.
Method 2) Metro issues the bonds on the Jurisdiction's behalf - requires Metro
Board approval and staff oversight.
Method 3) Jurisdiction borrows directly from Metro - requires Metro Board
approval and Metro full control of any bond sale.
The specific procedures for each type of...
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