TANPool - pooled short-term borrowing program
2014 TANPool information (454 kb )
The OSBA short-term borrowing program, TANPool, allows school districts, education service districts and community colleges to fill the funding gap sometimes created by the cyclical nature of school funding.
Why should we borrow?
Income from property taxes don't always arrive when you need them. Some districts use interfund loans to cover cash flow shortages. For others, the TANPool program provides the necessary bridge.
Are we eligible?
Any Oregon school district, education service district or community college district is eligible to participate if:
- You expect a low or negative balance in your general fund during the next fiscal year;
- Have successfully collected levied taxes for the past three years; and
- Have not defaulted on prior borrowings.
How does the program work?
Through a short-term Tax Anticipation Note (TAN), sold in the open bond market, you can borrow enough cash to cover expenses. Pooling the notes with others allows access to lower interest rates and the fees from borrowing are divided among particpants. Each participant can determine how many notes they want to issue and when they will mature. In addition, the cash may be invested while not in use.
How much can I borrow?
As long as certain sizing parameters are followed, TANs may be tax exempt and earnings from investing the cash may be exempt from arbitrage rebate rules. Somtimes, participants may even earn enough return on their investment to reduce or completely eliminate borrowing costs.
The amount you choose for your note is generally limited to the summation of 5% of the previous year’s general fund expenditures less the lowest projected balance for next year or plus the maximum projected deficit. Confusing? Don't worry we will help you determine the amount.
The pool is offered in the spring with first action items in late March. Miss the deadline? Other pools may be offered based on interest.
If you wish to participate download the 2014 TANPool information (454 kb )
Participants are required to submit or complete:
- A cash flow worksheet (template available by request)
- Current adopted budget
- Board resolution authorizing the note
Piper Jaffray-Seattle-Northwest Division
Carol Samuels or Lauren MacMillan
Hawkins Delafield & Wood LLP
Ann Sherman, Jennifer Cordova, Sandra McDaniel
Wells Fargo Bank
For more information, please contact Lori Sattenspiel.