The Knox County Commission voted unanimously Aug. 12 to authorize county administrators to increase the county's tax anticipation borrowing by up to $2 million to address potential shortfalls in cash flow.

County administrators described the action as a precautionary measure to avoid calling an emergency meeting if towns delay tax and fee payments. The commission was told the county already has an outstanding tax anticipation borrowing in place with Machias Bank and has drawn the currently-authorized $5.5 million; the new authorization would be an add-on rather than a separate long-term debt.

Officials said the added borrowing would carry a slightly higher interest rate than the existing borrowing and would use two separate interest rates for the two tranches. County staff emphasized that any funds borrowed would be repaid immediately as town payments and tax receipts arrive.

The commission discussed that cash flow has been tighter this year because of extraordinary departmental spending, reduced undesignated reserves used to help balance the budget, and inconsistent town remittances. County staff said they will seek follow-up information about whether the county has flexibility within the funding-allocation formula to avoid similar situations in future years.

The motion to authorize the increase passed 3 in favor, none opposed. Commissioners also authorized the county administrator to sign necessary documents on the commission's behalf if the increase becomes necessary before a subsequent meeting.

County staff said the authorization is precautionary and not an immediate draw; the county expects to know within a few weeks whether it must execute the increase based on town payments and fee collections.