Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Finance Line Of Credit topic
No spam. Unsubscribe anytime.
Smyth County board adopts up-to-$5M revenue anticipation note after cash-flow debate
Summary
After extended debate over cash-flow practices and borrowing, the Smyth County Board of Supervisors approved a resolution authorizing a revenue anticipation line of credit up to $5,000,000 for fiscal year 2026–27; the resolution caps maturity at June 30, 2027 and limits interest to 5.5%.
The Smyth County Board of Supervisors on July 23 adopted a resolution authorizing the issuance and sale of a revenue anticipation note (a line of credit) with a maximum principal amount of $5,000,000 to cover potential midyear cash-flow needs for fiscal year ending June 30, 2027.
The resolution, read in full by the budget committee, specifies that any note must mature no later than June 30, 2027, that the county may make incremental draw‑downs rather than a single borrowing, and that the interest rate on the note shall not exceed 5.5 percent. The resolution pledges the county's full faith and credit for repayment and requires non-arbitrage certificates and tax covenants to comply with federal rules on tax-exempt financing. "The note shall be payable from the collection of the taxes and revenues of the county for the fiscal year ending 06/30/2027," the committee recited as part of the resolution text.
Board members engaged in prolonged discussion before the final vote. One committee member objected to using borrowed money to cover operating costs, saying, "It's just my 2¢ worth. . . 1% on $5,000,000 is not minimal." The chair and other officials responded that the issue is timing of cash receipts rather than an out‑of‑control budget: "Our cash flow doesn't match our budgeted numbers," the chair said, describing the timing mismatch between tax receipts and expenditures.
Treasurer (Speaker 10) told the board he has historically arranged contingency borrowing with banks at this time of year and estimated a roughly 65–70 percent chance the county might need a partial draw this season; he emphasized the county could draw down less than the full authorized amount. The budget committee recommended adoption and the full board took a roll-call style vote; roll-call prompts and affirmative responses were recorded for multiple supervisors and the resolution was adopted by a majority of members present.
The action does not obligate an immediate draw and, according to staff, the county may draw incrementally and only to the extent needed. County officials said auditors and the state will review any use to ensure proceeds are used according to the resolution and applicable law.
The board recessed after the vote and moved to continue remaining agenda items on the third floor.
