Polk County Board of Education, August 2017

Board members listened as interim Superintendent Greg Teems presented the latest need for a Tax Anticipation Note during their regular monthly meeting on Tuesday evening, Aug. 8, 2017. 

Sean Williams/SJ

The Polk School board unanimously agreed to pass a Tax Anticipation Notice (TAN) from winning bidder Century Bank during their latest session on Tuesday.

The $1.6 million bridge loan will help pay for the school's bills and will be “paid back by December 28 of this year,” said school board chair Tommy Sanders.

To cover this year's needed TAN, Sanders said that they'll use SPLOST proceeds the board is getting back with a loan agreement they approved back in March.

The board voted in the spring that additional SPLOST funds will be used to pay back the general fund account for the costs incurred for the final payment for the Polk County College and Career Academy in the years ahead until the SPLOST ends in 2021.

"This will tie us over until that money starts coming in," Sanders said.

Though the Polk School District via the Board of Education gets regular checks from the Tax Commissioner's office, Sanders said the majority of payments and much of the funds the district needs to operate annually come in November. "It has to be paid off before the end of the year," Sanders said. "That's how they operate."

“We received two bids,” said interim Superintendent Greg Teems. “I recommend the board approve the Tax Anticipation Note being awarded to Century Bank.”

The board quickly moved to accept the issue given the board has experience with TAN.

Earlier in April, Teems also sought approval to seek bids for a Tax Anticipation Note, which would give the school system a line of credit if needed before Special Purpose, Local Option Sales Tax funds for the system from 2014 become available in October.

The Polk School District's financial report put them at finishing the year in June with revenue more than seven percent above what was budgeted, and expenditures were one percent less than what was expected for the year.

However, as they came into the first months of the FY 2018 budget year, the district had only $4.1 million in their general fund account, and SPLOST proceeds were at $406,707.63.

The balance for the latest E-SPLOST account was at $1.8 million.

The Polk School District is required to make quarterly payments back on bonds purchased on the strength of the E-SPLOST generating income above what was expected. However, construction costs overall for upgrades at schools across the county ended up forcing the Polk School District to pay out of pocket a total of $5.7 million for the final construction costs on the College and Career Academy facility, which has left the district slightly short of where they'd like to be for funding during months when tax payments haven't come in yet.

The board previously approved in March a plan to pay back the temporary loan for the College and Career Academy construction with SPLOST proceeds, but that will come only after the bond payments are completed for the year. The 2014 E-SPLOST was put on the ballot and approved by voters to provide funds for construction of new classrooms at Eastside Elementary School, new facilities at Rockmart High School, the Polk County College and Career Academy facility at Cedartown High School, and improvements and new classes at Westside Elementary.

Construction was called off at Westside Elementary due to potential issues with traffic if classes were added and more students came in, administrators explained in previous years after calling off the project. Also, past boards approved one-time payments to employees in lieu of raises during the holiday months, bills which totaled millions of additional dollars as well and has thus depleted the fund balance built up over past years.

This left the district in a position where they need the TAN to cover the bills through the end of the year.

Editor Kevin Myrick contributed to this report.