Finance Director Jennifer Hallman detailed the tax anticipation note process, explaining the need to seek out the funds upon recommendation of the county’s finance committee.
Tax anticipation notes are short-term debt obligations issued in anticipation of future tax collections, she explained.
In other words, the note is a government’s way of covering current debts by borrowing money against tax collections that come at a later date.
Douglas County receives 5 percent of its revenues each month – a total of 45 percent — through September, according to Hallman.
That means that 55 percent of the county’s revenues do not come in until November, when most property tax bills are paid.
With the county expenses going out at a rate of 8 percent each month, tax anticipation note funds are necessary to make up the difference in ready funds.
According to Hallman, the county was prepared to accept bids to borrow $10.5 million in short-term revenues this year, a decrease from $16 million borrowed last April and $18 million in March 2011.
The motion failed, however, when District 1 Commissioner Kelly Robinson and District 2 Commissioner Henry Mitchell voted against going forward with the bidding process.
Commission Chairman Tom Worthan and District 3 Commissioner Mike Mulcare voted to allow the bid. District 4 Commissioner Ann Jones Guider was absent from the meeting.
Robinson said he “always has pause when we use” tax anticipation notes and questioned not only the use of the note but questioning whether it was “premature.”
Hallman explained that use of such notes are very common among local governments, and that timing is of the essence.
“This is not a revenue bottom line,” said Hallman. “We know that we will get the revenue, but the bulk comes in at the end of the year.”
Worthan stressed the county must maintain a fund balance — also called reserves. The county is required by law to maintain a fund balance which is 10 percent of expenditures.
There also was division among commissioners on going forward with an application to the Department of Community Affairs to increase the size of the county’s state-sanctioned Opportunity Zone .
Chris Pumphrey, county development authority director, said an expanded Opportunity Zone designation would provide state tax incentives to new companies locating in the area and creating jobs.
The issue was tabled by a 3-1 vote, with Worthan voting to move forward with the application.
The targeted areas for opportunity zone designation are Lee Road at I-20, Sweetwater Industrial and Blair’s Bridge and Riverside Parkway.