MCSD board to vote on loan to plug gap from property tax delay

The Muscogee County School District administration plans to ask the school board next week to approve a resolution authorizing a short-term loan that would plug the expected gap in delayed local revenue as the Columbus Consolidated Government deals with thousands of appeals from property owners upset about their assessments soaring by as much as tenfold.

The delay is a bigger issue for the school board than the Columbus Council because MCSD receives a larger percentage of the Columbus property tax revenue than the Columbus Consolidated Government, approximately a 60-40 split, and 41 percent of MCSD’s fiscal year 2018 revenue is expected to come from local property taxes while the figure is 31 percent for CCG.

Although the school district previously announced it postponed nonessential expenditures while CCG deals with the property tax controversy, MCSD chief financial officer Theresa Thornton told the Muscogee County School Board during its monthly work session Monday evening the administration now recommends securing a Tax Anticipation Note.

If the board approves the resolution during its Aug. 21 meeting, Thornton said, the administration must decide by the September meeting whether to seek the loan through a request for proposals or an invitation to bid for the funds to be available by October and for MCSD to pay back the loan by the end of December.

District 5 representative Laurie McRae asked whether MCSD could treat the loan as a line of credit, even though it would be a lump sum, to lessen the actual debt. Thornton said yes.

District 7 representative Cathy Williams asked what the terms of the loan would be. Thornton said that depends on whether MCSD seeks the loan through an RFP or an invitation to bid. “Our goal is to make sure it’s less expensive,” Thornton said.

Noting that “we as a board didn’t put ourselves in this position,” vice chairwoman Kia Chambers, the nine-member board’s lone countywide representative, asked who would cover MCSD’s borrowing costs.

Thornton sparked laughter in the boardroom when she replied with a smile, “We can ask.”

District 2 representative John Thomas proposed making such a request.

“We are at the mercy of the other governing body,” he said.

Because state law allows Columbus Consolidated Government to charge MCSD a fee of 2.5 percent for collecting and dispersing revenue from property taxes, Thomas said he will prepare a motion for the board to approve next Monday a resolution asking council to reduce that fee by an amount equal to MCSD’s borrowing costs for this loan.

Thornton didn’t say how much money MCSD would borrow.

This story was originally published August 14, 2017 at 8:00 PM with the headline "MCSD board to vote on loan to plug gap from property tax delay."