RSS Feed
|
|
||||||||||||||
|
County switches to Umpqua for short-term loan needs Trinity County has secured a $3 million short-term loan from Umpqua Bank to provide operating funds and meet cash flow needs that arise at the end of each year as the county waits for tax revenues to roll in. The loan is called a tax revenue anticipation note (TRAN) and will be used to cover short-term cash flow needs for this fiscal year only. The entire note is to be paid back no later than June 1, 2009, and may be paid off sooner without penalty. The loan was secured at an interest rate of approximately 4.3 percent. Since Trinity County was booted from the statewide TRAN pool sponsored by the California State Association of Counties in 2006 because of mounting hospital debt and deterioration of its bond rating, North Valley Bank has provided the county with a year-end cash flow loan to bridge the gap between ongoing county expenditures like payroll and the arrival of tax revenue. The North Valley Bank interest rate has been around 8 percent in the past while Umpqua Bank this year was able to structure a tax-exempt loan at a rate around 4.3 percent. Although Trinity County has improved its bond rating back to an investment grade and made ongoing changes to its financial policies to upgrade its fiscal status in an effort to get back into CSAC's TRAN program, the exclusion has continued into the new fiscal year in part due to the county's continuing low cash balances available at year-end.
Trinity County Supervisors approved the Umpqua Bank loan last week and thanked county Auditor/Controller David Nelson for his work to negotiate the new deal. Nelson thanked Umpqua Bank for its willingness to work with the county as well as County Counsel Derek Cole's firm that he said provided quick and professional assistance in the process.
|
for larger version       |
|||||||||||||
