CLEARFIELD – On Tuesday the Clearfield County Commissioners approved to proceed with the issuance of a Tax Anticipation Note for 2018.
The TAN will be in the amount of $3 million and the sale will now go through CNB Bank.
A TAN is a short-term note for a state or local government to issue with expectations of repayment with imminent tax receipts.
A TAN provides state and local governments with the ability to stabilize cash flows and to proceed with bills and projects immediately rather than waiting to have cash in-hand.
The commissioners obtained a TAN last spring and closed it out by late summer, according to previous GANT News reports.
In December, the commissioners authorized Solicitor Kim Kesner to obtain a formal TAN commitment from First Commonwealth Bank.
He said it previously appeared that First Commonwealth Bank’s proposal of taxable borrowing at an interest rate of 1.85 percent was the lowest.
When county officials received the formal commitment, Kesner said they discovered an error had been made by First Commonwealth Bank in its proposal.
According to him, it was First Commonwealth Bank’s intention to propose a tax-free rate of 1.85 percent. The commissioners subsequently reviewed its TAN proposals again.
Kesner said at that time, it was determined that CNB Bank offered a better tax-free rate of 1.71 percent.
He noted that First Commonwealth Bank had been willing to waive any legal opinion from bond counsel, which was favorable and a cost savings of about $5,000 to the county.
He said Commissioner Mark B. McCracken conferred with CNB Bank officials to see if they would agree to the same provision, which they did preliminarily.
Kesner said CNB Bank more recently gave a formal commitment for a TAN at an interest rate of 1.79 percent with the waiver of any legal opinion from bond counsel.
Kesner recommended the CNB Bank TAN proposal and associated paperwork for approval.