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Commission approves tax‑anticipation notes to cover interim cash shortfall; advisers outline pricing and risks
Summary
The commission authorized interfund and external tax anticipation notes (up to $25M interfund; up to $100M external) to address cash‑flow timing; advisers said series B would price at 75% of SOFR plus 42 basis points with monthly resets and estimated interest in the low millions depending on draws.
Shelby County approved a resolution authorizing the issuance of tax anticipation notes to bridge interim cash shortfalls, including an interfund note (not to exceed $25 million) and an externally negotiated series B (not to exceed $100 million). Finance staff and outside advisers described the terms and the county’s cash position during a lengthy discussion.
Commissioner Michael Whaley, the budget chair, explained the committee recommendation, and finance staff answered detailed questions about the series B pricing. Albert Brown of PFN Financial Advisors said the rate is reset monthly, and the county’s negotiated formula is 75% of SOFR plus a 42 basis‑point spread; staff said 30‑ to 180‑day SOFR averages were around the mid‑3% range at the time of the discussion. Deputy director Daniel Schonbaum told the commission the administration estimates end‑of‑FY26 cash in the $50–60 million range and reiterated the plan to begin external loan repayments as receipts arrive (expected to begin in December; payoff by March in the normal cadence). Several commissioners spoke about structural budget choices; the resolution passed (9 ayes, 3 noes).
