“With approximately two-thirds of the school year completed we have received 34 percent of the anticipated local tax revenues,” said Financial Director Don Hood. “It is important to note that due to tax bills being mailed late tax payments are not due until the second week of March.”
While money continues to be collected from property taxes, Hood said the school has used two Tax Anticipation Notes (TAN) to augment revenue from local taxes and state funds.
Update: borrowed funds
The City of Calhoun established a TAN (Tax Anticipation Note) for the city schools in 2009 and 2010. Early in 2009 the schools borrowed $2.5 million from Regions bank. These funds were paid back in March 2009. The schools also borrowed $1.5 million against this TAN’s line of credit in the fall of 2009.
Early in 2010 they drew money from a $3.5 million line of credit from Georgia Bank & Trust, borrowing $1.5 million to complete the payback of the 2009 TAN. The 2010 TAN was paid back on February 26 of this year.
Hood explained that the total amount of interest paid on the 2009 TAN was $11,618. The schools paid $8,257 in interest on the 2010 TAN, he said.
The school board will be able to operate without drawing from the TAN beginning this month, he said.
A TAN allows the school to borrow money without any collateral or a down payment and covers salary and general operating expenses and have allowed the school system to continue daily operations by lessening the impact of uncertain cash flow due to delayed property tax collections and state funding reductions.
“The TAN is the only loan that the city has taken out on behalf of the city schools,” Hood said. “Local tax dollars collected by the city for the city schools are used to repay the TAN.”
“The TAN itself is a debt obligation that must be repaid,” he said.
“Hopefully our taxpayers understand and appreciate that all Calhoun City Board of Education employees work to ensure that funding shortfalls do not impact the quality education our students receive daily,” Hood said.
The schools’ tax digest was delayed this year because of more than 2,300 outstanding appeals, according to numbers County Tax Assessor Wayne Walters gave to the Calhoun Times in November.
Enough appeals had to be processed so that the total number fell below 1,300 or 5 percent of the total 26,000 parcels before a tax digest could be submitted to the state and before the school systems could begin seeing revenue from taxes collected.
Ask banks for Note without TAX ANTICIPATION; see which part of Director Hood hits the pavement first.