COUNTY OF RIVERSIDE OFFICE OF THE AUDITOR-CONTROLLER

1. COUNTY OF RIVERSIDEOFFICE OF THE AUDITOR-CONTROLLER Tax and Revenue Anticipation Notes (TRANS) Alma Avila, Senior Accountant April 21, 2005

2. Objectives • 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.

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

4. Benefits of TRANS • An inexpensive method of financing short term cash shortfalls. • Ability to produce additional income through arbitrage earnings.

5. TRANS 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

6. TRANS 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.

7. Auditor-Controller’s Role • Monitor General Fund (GF) cash. • Make projections for the following: • Current fiscal year ending cash balance. • Next fiscal year ending cash balance. • Next fiscal year’s lowest cumulative cash flow deficit. • Recommend TRANS borrowing amount.

8. Department’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.

9. 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.

10. ACO Contacts Alma Avila 5-3952 Jerry Wood 5-3574 aavila@co.riverside.ca.us