Carroll approves $2 million revenue anticipation note

By Allen Worrell -

The Carroll County Board of Supervisors has approved a resolution authorizing the issuance of a revenue anticipation note of up to $2 million.

The board unanimously passed the resolution during a special called meeting Monday night to help the county get through the time until tax revenues being to start coming in later this fall. County Administrator Steve Truitt said Treasurer Bonita Williams requested $2 million for the revenue anticipation note. Supervisor Bob Martin wanted to know who technically recommends such a note.

“All of the people that are in charge of the county’s finances work together to try to anticipate whether or not we are going to have cash flow issues,” Truitt said. “Ultimately at the end of the day, revenue and revenue anticipation would be the responsibility of the treasurer. If she doesn’t recommend it, our staff, if we do not agree with her, we would bring it to your attention if we felt there is an issue, but it would not be incumbent upon us to act without your concurrence if that situation were to arise. In this particularly case it was fairly close. You could go either way on whether we need a revenue anticipation note but there is a fairly substantial balance left at the end of the of the month.”

Truitt said personally his feeling was that the county could continue to evaluate revenues and wait and see if there was not a pressing need. Truitt said the Treasurer did not agree, so his office supported her and immediately went out and made arrangements to get a revenue anticipation note.

Assistant County Administrator Nikki Cannon said she asked in August and again in September if a revenue anticipation note was needed. Both times she said she was told no. But on September 11, she said it came to the attention of Truitt that a revenue anticipation note may be needed.

Supervisor Rex Hill asked how much money the county currently has in its coffers. Cannon said the county had $2.3 million as of Monday, but the treasurer’s report projects a September 28 balance of $456,000 after the school payroll is paid.

Looking at minutes from a financial update in August, Hill said it stated the county typically needs between $6 million and $7 million from July to September to get it to the point where taxes start coming in and the county’s cash revenue begins to change. Cannon said that figure has historically been about $5.6 million. But this is the third consecutive year Carroll has had to do a revenue anticipation note, Hill countered.

“Yes, and we closed out the year $700,000 better than we normally have so really it was close. It was close for not only finance, it was close for the treasurer,” Cannon said. “It was questionable whether or not we would need it and we were hoping we didn’t.”

Martin said the county’s financial situation has improved. Many businesses cover slowdowns in revenue until a surplus can be built up, he added, saying it was a good business practice.

“But that is the whole purpose of us having a fund balance policy, so if we get that up to where we should we shouldn’t have to get this revenue anticipation note,” Hill said. “How much does this cost us for the loans?”

County Attorney Stephen Durbin said the attorney fees are usually in the ballpark of about $5,000 for revenue anticipation notes.

“And right now we will be collecting one hundred-and-some-thousand dollars with the delinquent taxes already,” Hill said. “I think we need to step that up because I don’t want to be in this position next year and it takes almost a year to collect that…I know we talked about maybe holding off and spreading it out but I think we need to escalate that movement (of collecting delinquent taxes).”

Durbin said up until this point his law firm has been doing a lot of payment plans, closing out and selling property, collecting money that way. Notices are also being sent out to delinquent tax payers and his firm is reviewing title reports now and he expects to start filing law suits very soon. Cannon added since the board adopted its budget early this year, tax tickets should be going out sooner than in the past also.

Hill wanted to know how long the county could wait before having to sign a revenue anticipation note. Cannon said the attorneys needed it by the next day so they could have paperwork in place so the county could get the money by Friday. Truitt said what the county could do, however, was to not keep the note open as long as it has in the past.

“And if things continue to go well, if we didn’t need it or didn’t need as much as we got, we could go ahead and close it out,” Truitt said.

Cannon said closing out the note early would also save the county on associated fees.

“That is what I would like to see us do, close it out as soon as possible, and like Steve said, not hold it open,” Carroll County Board of Supervisors’ Chairman Robbie McCraw said.

Truitt said last year the revenue anticipation note stayed open longer than his office thought it should. He said he had “vigorous discussions” with the county treasurer that ultimately led to closing it out. He said he would work together with the treasurer’s office to get it closed out as quickly as possible this year.

“It’s better that we make this move as prevention than letting the dookie hit the fan and we are in a panic,” Martin said.

Hill asked if county staff concurred with the treasurer that a revenue anticipation note was truly needed.

“Bonita said she would prefer to have it Thursday than Friday,” Cannon said. “I am in concurrence I don’t want to be in a position where we need it and don’t have it.”

Truitt said the county is right on the edge of needing a revenue anticipation note at the end of the month. He said the county won’t be down $1 million as it has in the past, but will instead be up about $400,000. It’s the best position the county has been in financially since he has been here, Truitt said.

“So if you are a gambling man, you could say we can ride this out,” Truitt said. “But if something bad happens and Bonita is right and we collect absolutely no revenue for the first nine days of the month, I don’t think it would happen, but if it did we would be up the creek.”

Cannon said the county really has no movement left of expenditures to make sure such a note is not needed in the future. However, she said DMV stops on delinquent tax payers, once the county gets that in place, will help considerably.

Hill made a motion to approve the resolution for the revenue anticipation note for up to $2 million. Martin seconded the motion, which passed unanimously.

Allen Worrell can be reached at (276) 779-4062 or on Twitter@AWorrellTCN

County approves resolution in case money is needed until tax revenues roll in

By Allen Worrell