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Select Board approves revolving tax anticipation loan up to $1.7 million to cover operating cash flow
Summary
To bridge cashflow until 2026 real-estate taxes are collected, the board approved a one-year revolving tax anticipation loan (LOC) with Franklin Savings Bank up to $1.7 million at 4.5% fixed interest; the loan will only be drawn if needed and is unsecured, with bank signers identified in the motion.
The Select Board approved a one-year revolving tax anticipation loan (LOC) with Franklin Savings Bank in the amount of up to $1,700,000 to provide short-term operating liquidity until 2026 real-estate tax collections begin. The board recorded terms including a 4.5% fixed interest rate and that interest would only be paid on amounts actually drawn from the LOC.
The motion listed authorized signatories (the chair, vice-chair and board members and treasurer) and noted the town will price the LOC as a temporary financing mechanism; the board said tax receipts typically begin to arrive in June and the LOC is intended only to bridge a cash-flow gap. The motion passed by voice vote with an announced tally of 4-0.
Board members discussed the timing of debt service and the towns existing bond payments; staff said the LOC will remain open for one year and the town intends to repay the draws as tax receipts are collected.
