06/02/2014 – TAN

Authorization to Issue a Tax Anticipation Note (TAN)

Rationale
Approval of the authorization will allow for the issuance of Tax Anticipation Notes (TANs) to fund general fund operations until ad valorem taxes are received.
Financial Impact
The TANs will provide up to $50,000,000 to the school district. The net cost of funds is expected to be less than $125,000.

Presented by: Dr. Michael J. Bell, Chief Financial Officer, Division of Finance

Bell
Due to financial situation we qualify for $35M – $40M in TANS (Tax Anticipation Notes). A TAN is not debt, it’s a short term note within a budget year, by Georgia law, must be paid off by the end of the calendar year.

We need these funds for cash flow and will pay it off at the end of the year.

McMahan
Does this go through the regular RFP process?

Bell
We have a financial team, legal advisory and financial advisory. The awarding will be on a low bid basis.

Mayfield
We are looking at $35M – $40M?

Bell
Last year it was $70M. The financial advisory has looked at our cash flow and think we would qualify for $35M to $40M. That will get smaller and smaller as our financial position improves.