Davis County will sell $5 million in tax anticipation notes on Jan. 3 to raise cash to pay for its government operations until property taxes are collected at the end of the year.
The county commissioners this week gave final approval to the tax note sale.Bond counsel Larry Denham said the county will pay 6.09 percent interest on the notes, down from last year's 6.24 percent interest.
By re-investing the money that is not needed immediately through the state treasurer's investment pool, the county will earn more in interest on the funds than it will pay out.
The county will pay a total of $305,000 in interest but should earn more than $400,000, county budget analyst LaMar Holt said. The county will earn about $425,000 interest on the same amount of tax notes issued for this year, Holt said.
The county's budget year starts Jan. 1, but property taxes are not collected until late November or early December, leaving the county with 11 months of cash flow to fund. To raise the cash, the county sells tax anticipation notes.
Denham said the cost of issuing bonds is slightly lower this year than in the past. The bond transactions are done by computer, Denham said, estimating the electronic transaction method will save the county between $500 and $1,000.