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Hiram council authorizes tax anticipation note up to $1.3 million, approves sale to Magnolia Bank
Summary
The Hiram Mayor and Council adopted a resolution authorizing a tax anticipation note with a $1.3 million principal face amount and a drawdown feature; counsel said Magnolia Bank was the successful bidder and the taxable interest rate is 7%.
The Hiram Mayor and Council on July 7 adopted a resolution authorizing issuance and sale of a tax anticipation note to pay the city’s current expenses.
Tommy Ratchford, who identified himself as attorney and advisor on the document, told the council the note’s principal face amount is $1,300,000 and that it has a drawdown feature so only amounts needed will be drawn and interest will accrue only on amounts drawn. He said Magnolia Bank of Louisville, Kentucky, submitted the successful bid.
When a council member asked about cost, Ratchford said the interest rate is 7% on a taxable basis. The council then voted to adopt the resolution (moved by a council member and seconded); the transcript records a voice vote but does not include a roll-call tally.
The resolution authorizes the sale to Magnolia Bank and allows the city to draw funds as needed to cover current-year expenses. The city did not provide detailed projections in the meeting about how much of the authorized principal it expects to draw immediately or about the planned repayment source beyond general references to current revenues.
Next steps: the resolution gives the city authorization to complete the sale and draw as necessary; staff and counsel did not provide a public schedule for draws or closing in the transcript.
