B6.02 - Authorize the Superintendent to Establish a $100,000,000 Line of Credit (LOC) in Fiscal Year (FY) 2020/2021 with Wells Fargo Bank, N.A., in the Event of Any Operational Cash Flow Deficits (Finance Division)

As authorized by Florida Statute 1011.13, an LOC or Tax Anticipation Note may be established to fund any operational cash shortfall experienced by the district.  An LOC has been authorized each fiscal year since FY 1986/1987, but never utilized.

This is a precaution in the event there are circumstances causing a delay in payment from the Tax Collector of Ad Valorem dollars or unforeseen circumstances result in a drain of our cash reserves.

The LOC has never been utilized.

In the event of operational cash flow deficits a drawdown will be made to meet payroll and vendor obligations.

* Establish a strong foundation of financial stewardship

Authorize the Superintendent to establish a $100,000,000 LOC with Wells Fargo Bank, N.A. in the event of any operational cash flow deficits.

Steve Brady, Budget Department Manager, Services & Support, steve.brady@sdhc.k12.fl.us, (813) 272-4347

If the note is executed, interest will be calculated at the variable rate in effect at the time of closing. A current indicative rate would be equal to 80 percent of one month London Inter-bank Offered Rate, or LIBOR, plus 65 basis points (.78). Legal fees are contingent upon issuance of the Note. Repayment of the note would come from Ad Valorem Tax Revenue.