Commissioners could give the county the greenlight to borrow about $64 million in short-term loans Tuesday.
The bonds, known as tax anticipation notes, are down from an estimated $70 million approved in April.
The borrowing is a financial stopgap the county performs between fiscal years, a practice dating back to the early 1980s, as Cobb collects most of its revenues in the form of property taxes near the end of its fiscal year, which closes Sept. 30. The county must therefore take out TANs earlier in the fiscal year to pay for its operations, according to Bill Volckmann, the county’s finance director.
When the county brings in property taxes, it pays back the TANs. Then it uses the remainder of the revenues to continue operations through the middle of the next year before another TANs issuance to continue the cycle.
Commissioners in late April unanimously approved a measure allowing Volckmann to begin the process needs to issue the TANs, which include a competitive bid process to find a lender who will offer the lowest interest cost to the county. At the time, the estimated amount of this year’s TANs was $70 million.
Last year the county borrowed $90 million through its use of TANs after borrowing $60 million the previous year. Volckmann attributed the increase to higher costs and the need to compensate for the use of nearly $20 million in one-time funds to fill a gap in the fiscal 2018 budget.
But in a news release, Volckmann cited the “slight increase of the millage rate” approved last year as a driver behind the lower amount.
Chairman Mike Boyce’s proposed property tax increase of 1.7 mills was approved by a 3-2 vote last July, hiking the general fund property tax hike from 6.76 mills to 8.46 mills.
“Because we need to borrow less, and the county has maintained its triple-A rating, this will result in significant savings for taxpayers,” Volckmann said.
In Thursday’s release, Volckmann said the savings will be in the $300,000 to $400,000 range, though the exact amount of savings won’t be known until closing on the TANS, which — if approved by commissioners — will happen at the end of June.
“This shows Cobb County’s budget is moving in the right direction,” County Manager Rob Hosack said in Thursday’s release. “After years of struggling to balance the county’s budget, we are in a much better place now and can address some pressing concerns that include taking care of our employees.”
The Cobb Board of Commissioners meets at 9 a.m. Tuesday in the Cobb Government Building.