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Socorro ISD to seek $30 million tax‑and‑revenue anticipation note to bridge cash‑flow timing
Summary
Financial advisers told the Socorro ISD board they plan to solicit bids for a $30 million tax‑and‑revenue anticipation note (TAN) for fiscal 2027 to cover timing gaps in state and local receipts; advisers used a conservative 5% annual rate to estimate roughly $1.1 million in interest, and staff said that cost is built into the FY 2026–27 budget.
At a June 3 briefing, the district’s financial advisers told Socorro ISD trustees they plan to solicit bids for a $30 million tax‑and‑revenue anticipation note to bridge predictable cash‑flow timing gaps early in the fiscal year.
Dr. Angel Marianes, introduced as part of the adviser team, summarized recent note sizes (about $25 million in 2024, $35 million in 2025) and said the district will invite banks to bid on a roughly $30 million short‑term note for 2027. "We’re looking at 30 million moving forward for this fiscal year 2027," the advisers said. They outlined a timetable to send term sheets to banks, receive bids, and return to the board on June 16 to approve a bank and final rate.
Trustees asked about estimated interest costs. Using a conservative 5% coupon as an illustration, advisers estimated the interest/issuance cost at about $1.1 million; Don Gonzalez, a member of the adviser team, clarified that 5% was presented as an annual rate and actual cost will accrue for the shorter note period. "Five percent is the annual rate. The date in which the amount is fully paid off will accrue interest to that date," Gonzalez said.
CFO David Cis confirmed that the district has included the projected cost in its FY 2026–27 budget assumptions. Advisors also noted the TAN would likely be issued unrated because it would be short‑term and purchasers of short notes typically do not require a formal credit rating. Advisers said the TAN is a routine cash‑management tool used to cover months when state disbursements are not made and that an improved fund balance over time could eliminate the need for future TANs and save the district interest costs.
Next steps: Trustees expect the finance team to solicit bids, return with offers on June 16, and ask the board to approve a final bank and rate before issuing the note.
