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Franklin County to issue tax anticipation warrants

  • Franklin County Board members met Monday at the Campbell Building to discuss a number of issues during their committee meetings.

    Franklin County Board members met Monday at the Campbell Building to discuss a number of issues during their committee meetings.
    Photo by Rick Hayes

 
 
Posted on 5/18/2017, 5:00 AM

Franklin County's most recent financial crisis has led the county board to take action for temporary relief.

The board on Tuesday approved a resolution to issue tax anticipation warrants purchased at a local financial institution at 3 percent interest, according to Treasurer Keith Jones.

"What that resolution does is borrowing in advance of our first corporate tax installment that we will get in early September," Jones said during committee meetings Monday. "The resolution is asking for $500,000 from the bank. You can borrow up to 85 percent of the levied amount, which is about $1.3 million. We could get $1.1 million."

Jones said the bond issue will have a life of about 90 days.

Repayment of the bonds will depend on when tax bills go out. There seemed to be some confusion among the board and officeholders when that may happen. However, the best guess is that the current tax cycle is operating on about the same schedule as last year so bills should go out by the end of June. Taxes were due in August and October last year.

"In 90 days we're going to have to pay it back. We hope we can get things paid down by then, but if we don't get the income in we're looking at drastic measures by the end of the year," Finance Committee Chairman Alan Price said.

Member Jack Warren said the West Frankfort Board of Education has had to issue tax anticipation warrants in the past.

"I'll have to say, things didn't look as dire at the time we did it and it worked out okay for us. We got the funds due us and got back on our feet. Something bothers me about this deal we're going through," Warren said. "I think we should pass it with the anticipation of not using the anticipation."

Chairman Randall Crocker said the issue requires a resolution and an ordinance. He said the resolution could be approved at a special meeting next week.

County officials have been financially strapped for several months due to nonpayment of reimbursement payments from the state for probation and the detention center.

Jones reported he can make Friday's payroll without a problem; however, after the board pays its current claims, the common account fund balance will be under $200,000. The county needs about $400,000 for each payroll, he added.