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2011-18-260 -Tax Anticipation Notes City of Miami Gardens Agenda Cover Memo Council Meeting Date: September 14, 2011 Item Type: (Enter X in box) Resolution Ordinance Other X Fiscal Impact: (Enter X in box) Yes No Ordinance Reading: (Enter X in box) 1st Reading 2nd Reading x X Public Hearing: (Enter X in box) Yes No Yes No x Funding Source: General Fund Advertising Requirement: (Enter X in box) Yes No x Contract/P.O. Required: (Enter X in box) Yes No RFP/RFQ/Bid #: X Strategic Plan Related (Enter X in box) Yes No Strategic Plan Priority Area: Enhance Organizational Bus. & Economic Dev Public Safety Quality of Education Qual. of Life & City Image Communication Strategic Plan Obj./Strategy: (list the specific objective/strategy this item will address) N/A x Sponsor Name Danny O. Crew, City Manager Department: City Manager City Manager’ s Office Short Title: AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF MIAMI GARDENS, FLORIDA, AUTHORIZING THE CITY MANAGER UPON WRITTEN RECOMMENDATION BY THE FINANCE DIRECTOR AND APPROVAL BY THE CITY ATTORNEY TO TAKE ANY ACTIONS NECESSARY TO ENTER INTO AN AGREEMENT WITH THE CITY’S PRINCIPAL DEPOSITORY, FOR THE ISSUANCE OF TAX ANTICIPATION NOTES OR OTHER APPROPRIATE BORROWING INSTRUMENT FOR THE PURPOSE OF ENSURING ADEQUATE CASH FLOW UNTIL SUCH TIME AS SUFFICIENT AD VALOREM TAXES HAVE BEEN REMITTED BY THE TAX COLLECTOR FOR MIAMI‐DADE COUNTY TO PAY THE OBLIGATIONS OF THE CITY; PROVIDING FOR ADOPTION OF REPRESENTATIONS; REPEALING ALL ORDINANCES IN CONFLICT; PROVIDING A SEVERABILITY CLAUSE; PROVIDING FOR INCLUSION IN CODE; PROVIDING AN EFFECTIVE DATE ITEM I-1) ORDINANCE SECOND READING/PUBLIC HEARING Tax Anticipation Notes 1515 NW 167 Street, Building 5 Suite 200 Miami Gardens, Florida 33169 Staff Summary: As in 2010, the City anticipates that as we approach the new fiscal year, we may find ourselves short of actual cash. This is due to three factors: 1) The City does not receive a steady cash flow; instead, it receives the bulk of its cash in December‐April when property taxes are due. This often leads to a cash shortage in the months prior to receipt of the taxes. 2) Unlike most cities with utility systems and their large cash reserve, Miami Gardens has only the General Fund reserve to serve as a cash pool. Due to the reduction in the City’s reserve, this pool of liquid cash is limited; and 3) The City has a number of federal and County grants outstanding. We are required to expend the cash and then seek reimbursement. This requires sufficient cash to continue to meet current obligations until reimbursement arrives. The combination of these three factors makes it likely that we will need the ability to short‐term borrow sufficient cash to carry us through the tax payment season. Last year Council approved Tax Anticipation Notes; however, we never had to use them as several major grant reimbursements arrived in time to avoid the need for a cash flow supplement; however, it does appear that we will have to use the TAN this year due our decreased reserve balance. This TAN is repaid automatically when property tax receipts are deposited in our account in December and January. The note self‐terminates at the end of January and no permanent debt is created. The City’s Charter requires an ordinance for this financing instrument. Details (interest and terms) of the TAN will be contained in a resolution accompanying the second reading at the first meeting in September. Proposed Action: It is Recommend that the City Council approve the TAN ordinance on first reading. Attachment: None