Atlanta Public Schools will borrow $60 million to cover expenses while the district waits for Fulton County tax revenue to start pouring in.
This marks the third year that APS has had to take out a loan -- called a tax-anticipation note -- to cover costs because of delays in receiving Fulton County taxes, which make up about two thirds of the district’s operating budget.
The school board approved the loan Thursday.
How much APS will pay in interest on this year’s loan depends on how quickly Fulton County sends out tax bills and how soon the district then receives tax revenue.
If the district pays off the loan in mid-November, it will cost APS about $260,000 in interest. If the district waits until the Dec. 31 deadline to pay off the loan, it will cost about $418,000 in interest.
The lender with the winning bid is First Citizens Bank.
The district initially considered borrowing up to $175 million, but officials said that full amount wasn’t needed because a judge last week gave the county approval to send out tax bills. Fulton County needed to obtain a court order before sending out tax bills this year because of the high number of pending property value appeals.
Officials expect tax bills to go out no later than mid-September.
School board chairman Jason Esteves pointed out this is the third straight year that APS has had to borrow money because of tax-collection delays.
The combined cost of those three loans is roughly $1 million, officials said.
“This is the third year in a row that we’ve had to take out a TAN, and it’s for the simple fact that our tax notices aren’t going out on time,” Esteves said. “A million dollars is a lot of money, and it’s not our fault.”
Fulton County Schools officials also are considering taking out a loan for the same reason. The school board gave preliminary approval earlier this month to borrow up to $70 million. The district is still evaluating if the loan will be necessary.
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