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Clayton County school board reviews plan to seek up to $45 million in tax anticipation notes
Summary
Board members were briefed on a proposal to issue up to $45 million in tax anticipation notes after statewide delays in property tax assessments; district advisers said roughly $10 million may be needed in November with the larger amount serving as a cushion and described a likely low-cost line-of-credit structure.
The Clayton County Board of Education discussed a proposal to issue tax anticipation notes this fall to manage a possible temporary cash-flow gap caused by statewide delays in property tax assessments.
At a presentation beginning with a staff overview, the district’s financial adviser said, “The proposal is that, we go and issue $45,000,000 in tax anticipation notes.” He explained the district’s cash-flow model showed about a $10,000,000 shortfall if tax collections follow the current timeline and described the remaining $35,000,000 as an insurance cushion against further delays. The adviser added he planned to structure the borrowing as a line of credit so the district would only pay interest on amounts actually drawn.
Board members asked detailed questions about cost and repayment. The adviser said he expects an interest rate in the neighborhood of 3.5% and offered a concrete illustration: “So it'd be $50,000 if we had to borrow it in November and pay the 3 3.5 percent interest,” for borrowing roughly $10 million for two months. He also said that if the line is not drawn the district could invest unused proceeds in Georgia Fund 1 and potentially offset borrowing costs.
The discussion noted a statewide cause: recent changes to state law (House Bill 581 and Senate Bill 33) required reassessments and software updates in many counties, delaying issuance of tax bills and, by extension, collections. Presenters emphasized this is a short-term cash-management step; any final borrowing would return to the board for approval following a public bidding process.
Next steps: board members gave staff and advisers authorization to prepare bid documents and return with firm numbers and a recommendation; the board did not approve any borrowing at this meeting.
