Title
Sale of Delinquent Tax Receivables
Finance Office
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Brief Description:
description
(Sale of Delinquent Tax Receivables) Recommends approval of sale of delinquent tax receivables to the California Statewide Delinquent Tax Finance Authority for Fiscal Years 2026, 2027, and 2028, and authorize execution and delivery of related documents and actions.
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Recommendation
Action Proposed:
1) Approve the attached resolution (Attachment A) approving the sale of delinquent tax receivables to the California Statewide Delinquent Tax Finance Authority (“Finance Authority”) for the fiscal years ending June 30 in each of the years 2026 through 2028
2) Authorize the execution and delivery of related documents and actions related to the transactions
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Body
Background:
In June 2001, the Board authorized the Chief Financial Officer to join a Joint Powers Authority (JPA) enabling the Chief Financial Officer, on behalf of the District, to sell or transfer the District’s right to its delinquent property taxes to the JPA. The JPA created is the Finance Authority.
Under this program, the District receives annually 100% of the amount of the delinquent taxes plus a negotiated premium, which for 2025 was 8.5%. The JPA or the County Auditor-Controller only reports to the State the principal portion of the delinquent property taxes. The District retains the premium, which is not subject to State revenue limit offset. Since the initial financing in 2002, this program has generated $43.7 million in unrestricted revenue to the District.
Expected Outcomes:
The District will be able to sell its delinquent property taxes to the California Statewide Delinquent Tax Finance Authority and generate the negotiated premium.
Board Options and Consequences:
The Board may elect not to sell the delinquent property taxes. This would mean that the District will not generate the negotiated premium that is part of the agreement, which averaged $1.9 million over the last 4 years. The District would also not receive the amount of delinquent taxes up front as part of the financing.
Policy Implications:
The District Debt Management Policy, Article II, Section 2.02, states that the District may participate in the annual pooled financing of delinquent property taxes to the extent that the Chief Financial Officer determines such financing produces significant benefit to the District.
Budget Impact:
The delinquent tax financing has generated an average of $1.9 million per year in additional revenue to the unrestricted general fund over the last 4 years.
Student Impact:
The Finance Authority generates additional unrestricted revenue which can be made available for educating students.
Equity Impact:
|
Component |
Score |
Score Rationale |
|
Recognition |
3 |
The premium received from the JPA will be available for general fund unrestricted uses, for which equity is a priority. |
|
Resource Prioritization |
2 |
The premium received from the JPA is unrestricted general fund revenue and budgeted accordingly, for which equity is a criteria. |
|
Results |
3 |
The premium received from the JPA is unrestricted general fund revenue and allocated accordingly, which equity is a priority. |
|
TOTAL |
8 |
|
Issues and Analysis:
Participation in the pooled financing of delinquent property taxes is necessary to generate the negotiated premium that is part of this agreement. Participation is also necessary to receive the amount of delinquent taxes up front as part of the financing.
Attachments:
Attachment A - Resolution Delinquent Tax
Submitted:
07/30/26
RESPECTFULLY SUBMITTED, APPROVED & PRESENTED BY:
______________________________ _____________________________
ANDRÉS E. CHAIT SAMAN BRAVO-KARIMI
Superintendent of Schools Chief Financial Officer
Finance Office
REVIEWED BY:
______________________________
DEVORA NAVERA REED
General Counsel
___ Approved as to form.
REVIEWED BY:
______________________________
KURT E. JOHN
Deputy Chief Financial Officer
___ Approved as to budget impact statement.