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Knox County authorizes $2 million increase to tax anticipation note to shore up cash flow
Summary
The commission approved an authorization to increase its tax anticipation note (TAN) by $2 million to provide short-term cash-flow flexibility; county finance staff said the extension is precautionary and Machias Bank has agreed to extend the additional amount with separate interest terms.
The Knox County Commission authorized an increase of $2,000,000 to the county's tax anticipation note (TAN) at its Aug. 12 meeting to provide short-term cash-flow flexibility if town tax and fee payments are delayed.
County finance staff explained the TAN is a short-term borrowing tool used to bridge cash-flow gaps. "This is just to give us that ability to have some flexibility over the next [few weeks]," a finance presenter said. Officials said the county's current bank, Machias, has agreed in principle to add $2,000,000 to an existing TAN and that the existing TAN of $5,500,000 had already been utilized.
Speakers emphasized the authorization is precautionary: if towns remit taxes and fees on schedule, the county may not need to borrow. County staff said the increases would carry slightly different interest rates and that a lawyer was on standby to draft contract language if borrowing became necessary. The motion to authorize the increase was moved, seconded and approved; the chair announced "3 in favor and unopposed."
County officials said they will monitor receipts and only draw the extended TAN as required, and they will return to commissioners if terms require further amendment.
