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Committee approves up to $158 million in tax‑anticipation notes to address seasonal cash flow
Summary
Committee authorized issuance of up to $158 million in interfund tax anticipation notes (TANs). Finance staff said the borrowing is an internal cash‑flow tool that typically draws from funds with steady revenue, such as water, and does not impede those funds’ operations.
The Budget & Finance Committee approved a resolution authorizing issuance of interfund tax anticipation notes not to exceed $158,000,000 to bridge seasonal timing differences in property‑tax receipts.
Mary Jo Wiggins of the Finance Department explained to committee members that the TANs are an internal borrowing mechanism used because property tax revenue is not collected evenly across the year: "The tax anticipation notes are basically an internal debt that we take out because we don't receive all of our property tax revenue at the front end of the year." The borrowing typically comes from enterprise funds such as Metro Water Services, which receive revenue year‑round.
Committee members asked whether borrowing from enterprise funds would slow operations such as water‑system repairs. Wiggins answered that the enterprise funds maintain sufficient cash flow for their operations and that the internal borrowing does not impede their ability to run day‑to‑day services.
The committee approved the TAN authorization by voice vote, 11-0. Finance staff said the notes are a routine cash‑management tool and do not represent a new external debt obligation for taxpayers; the repayment depends on future property‑tax receipts.
