CLEARFIELD – Clearfield County is having cash flow issues and approved a proposal for a Tax Anticipation Note (TAN) of up to $2.5 million at Tuesday’s work session meeting.
“We don’t begin receiving our tax funds until April,” said Commissioner Tony Scotto, chair. “Our balances are a little bit low right now and we still have bills.”
The commissioners recently requested TAN proposals from banks around the county and reviewed their different options. A TAN is a line of credit issued to government.
According to Scotto, the county had the option between a tax-free rate and a taxable rate. He said the tax-free rate included $5,000 for bond counsel representation.
“The rate would have been lower, but when you’re adding $5,000, it wouldn’t have made sense. We would’ve actually been paying more than with the taxable rate.”
The commissioners received several proposals, which came from CBT Bank, CNB Bank, Northwest Savings Bank, PNC Bank and First Commonwealth Bank.
On Tuesday the commissioners voted to approve a proposal from First Commonwealth Bank with a taxable rate of 2.19 percent, plus associated fees and a borrowing limit of up to $2.5 million.
Commissioner Mark B. McCracken said they’ll look closely at budget figures and only draw out what they need. The commissioners plan to make their initial draw upon completion of the paperwork.
The commissioners, however, don’t have a specific amount for the first withdrawal. McCracken said the TAN will provide the county with capital for operations through the end of April or early May.
Scotto and McCracken said while the county will have through the end of the year to pay off the TAN, it will be done as soon as possible to save on interest costs.