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File #: 2017-0842   
Type: Program Status: Agenda Ready
File created: 12/14/2017 In control: Finance, Budget and Audit Committee
On agenda: 2/14/2018 Final action:
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.
Sponsors: Finance, Budget and Audit Committee
Indexes: Debt, Formula Allocation / Local Return, Guidelines, Local Returns, Measure R, Procedures, Program, Proposition A, Proposition C
Attachments: 1. Attachment A - Borrowing Guidlines for Local Return Programs, 2. Attachment B - Examples of Prior Local Return Borrowings
Related files: 2018-0091
Date Action ByActionResultAction DetailsMeeting DetailsAudio
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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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