Cobb to issue $64 million in TANs to fill short-term gap

The annual short-term gap in Cobb County operating funds will be filled this year by an estimated $64 million in 2019 Tax Anticipation Notes (TANs) - much lower than last year’s $90 million TANs. (Courtesy of Cobb County)

The annual short-term gap in Cobb County operating funds will be filled this year by an estimated $64 million in 2019 Tax Anticipation Notes (TANs) - much lower than last year’s $90 million TANs. (Courtesy of Cobb County)

The Cobb County Board of Commissioners agreed on June 11 to issue and sell an estimated $64 million in 2019 Tax Anticipation Notes (TANs) - significantly lower than last year’s $90 million TANs.

That action means the county supplies its operating funds by issuing TANs since those operating funds are depleted halfway through the financial year, according to Cobb’s Finance Director-Comptroller Bill Volckmann.

The reason for the depletion is the county does not collect property taxes to fund county services for Cobb residents until after the close of its fiscal year which begins on Oct. 1 each year.

“Because we need to borrow less and the county has maintained its triple-A rating, this will result in significant savings for taxpayers,” Volckmann said in a statement, estimating that savings in the range of $300,000 to $400,000.

Since the early 1980s, the practice of issuing TANs has been followed and provides attractive borrowing rates to the county, he added.

On or about June 19, Volckmann said he expects to conduct the competitive public bid for the 2019 TANs.

Historically, interest on the TANs has been tax-exempt which, coupled with their low risk and Cobb’s superior credit rating, has made them attractive to investors, he explained.

One of the nation’s top three bond rating agencies, Moody’s has changed its “negative outlook” for Cobb’s financial condition last year to a “stable outlook” this year, Volckmann told the commissioners.

Information: CobbCounty.org/communications/news/cobb-borrow-less-fill-annual-budget-gap