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Ossipee Selectmen authorize $3.5 million TAN facility for emergency cash needs
Summary
Selectmen authorized town staff to set up a Tax Anticipation Note (TAN) facility of up to $3.5 million as a worst‑case contingency for 2026; staff said the rate is expected around 6.25% and the note would not be tax‑exempt because the town does not anticipate a cash‑flow shortfall.
Ossipee Town Selectmen voted to authorize town management to initiate a Tax Anticipation Note (TAN) facility of up to $3.5 million to be available for 2026 as a contingency financing mechanism.
The measure authorizes town staff to begin the closing documentation and allow the treasurer to finalize the loan documents if the bank requires formal signatures. A town staff member said the lender quoted an interest rate of about 6.25% and noted the loan would not qualify for tax‑exempt pricing because the town does not currently project a cash‑flow deficit that would meet the tax‑exempt criteria.
Board members emphasized the authorization does not mean the town intends to borrow the full amount; rather, the line is a precautionary facility in case unexpected cash needs arise. One board member said the $3.5 million ceiling reflects a bank determination of the town’s borrowing capacity for a worst‑case scenario.
The motion to authorize the facility passed by voice vote. The board instructed staff to prepare the closing documentation and to present any drawn amounts for future board awareness and required approvals.
Clarifying detail: the board also discussed budgeting an estimate to cover interest costs for fiscal oversight and confirmed the line would be renewed annually if the town chooses to keep the facility available.
