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Floyd County Council approves ordinance to finance health department building with up to $3.2 million in interim financing
Summary
The Floyd County Council voted to approve Ordinance 2025-03, authorizing up to $3.2 million in general obligation bonds and a bond anticipation note to purchase and renovate an existing building for the county health department; the ordinance includes a backup property-tax levy to cover interest if needed.
The Floyd County Council on a unanimous vote approved Ordinance 2025-03 authorizing the issuance of general obligation bonds in an amount not to exceed $3,200,000 and permitting the issuance of a bond anticipation note (BAN) to finance the purchase and limited renovation of an existing building to serve as the county health department.
The ordinance, presented by financial advisor Tim Berry and counsel Brad Bingham of Barnes & Thornburg, allows the county to use a BAN as interim financing and to capitalize interest if the council does not appropriate interest payments before closing. Bingham said, “A bond anticipation note or a BAN is just a fancy word for interim financing,” and explained the BAN can be amortized using the county’s cash flow so that long-term bonds might never be issued.
The ordinance includes an initial appropriation tied to the financing proceeds and authorizes, as a credit backstop, a property-tax levy to cover interest on the BAN if appropriation or other cash flow proved insufficient. Bingham told the council that the levy is intended only as a fallback so purchasers of the BAN understand how interest would be paid during the interim period.
Council members discussed the timing and mechanics of capitalized interest, with one member clarifying that capitalized interest would cover semiannual payments until the council either appropriates funds to pay those interest payments or the BAN is taken out by bonds or otherwise amortized. Council members also noted the BAN could remain outstanding for up to five years and that issuing bonds later remains an authorized option under the ordinance.
After discussion the council suspended the rules by unanimous consent and passed the ordinance in the same meeting. The council’s action authorizes both the interim BAN financing and the bond issuance authority so the county retains flexibility while moving forward with purchase of the health department building.
Votes at a glance: Ordinance 2025-03 (authorizing bonds/BAN up to $3,200,000) — Approved (motion to suspend rules and pass by unanimous consent).
