Trustees Approve Plan for Joint Issue of Notes

Trustees of Fullerton School District gave approval this week for tentative formation of a joint powers authority with Anaheim Union High, Magnolia and Cypress school districts to issue tax-exempt notes.

Tax and revenue anticipation notes are a financial vehicle commonly used by cities and school districts to balance cash flow in anticipation of future income.

Anaheim, Magnolia and Cypress will vote on the formation of the authority within two weeks, and the notes could be issued then, Fullerton district officials said.

No action will be taken if Orange County agrees to issue the notes for the school districts in “a timely manner,” Fullerton officials said but added that is not likely.

In a recent report to the school board, county officials say they “would be unable to issue the [notes] until mid-July or possibly much later.” It further states that “such a delay could result in much higher interest rates” on the notes.

The school board voted unanimously to proceed, rather than wait for the county.

Officials said such notes are routinely issued so that school districts and cities can pay their bills without running out of money as they wait for property tax revenue.