In a recent government meeting, officials discussed the procurement of a line of credit to manage cash flow needs as they approach the end of the fiscal year. Two bids were received for a tax anticipation note (TAN), with Mascoma offering a fixed rate of 6.70% and M&T Bank quoting 6.74%. The officials noted that the current economic climate has led to higher interest rates, making the 6.70% rate appear unfavorable compared to previous years when rates were as low as 4.70%.

The TAN is necessary to bridge the gap until tax revenues are collected on December 17, which is a critical date for funding county services. Officials emphasized that the line of credit would not require drawing the full amount immediately, allowing for more strategic management of funds based on actual cash flow needs. It was indicated that they might only need around $7 million of the nearly $10 million available.

Concerns were raised about the potential for interest rates to decrease in the near future, but officials acknowledged the uncertainty of this outcome. They discussed the implications of choosing a variable rate option, which could fluctuate based on market conditions, versus the fixed rates currently offered.

The anticipated interest expense for the short-term borrowing was projected to remain under $100,000, with officials planning to draw down funds as necessary to minimize costs. The meeting underscored the importance of careful financial management in light of rising interest rates and the timing of tax revenue collection.