FARMINGTON -- Davis County sold $5 million in tax and revenue anticipation notes Wednesday, giving it the cash flow it needs to operate government until property tax revenues arrive in December.
The county commission approved the sale Tuesday, and the county acted Wednesday, obtaining an interest rate below 0.2 percent.
The county sold the notes to low bidder Mitsubishi UFJ Securities USA, Inc. of San Francisco, said Davis County Clerk/Auditor Steve Rawlings.
The company, one of five submitting a bid for the notes, provided the county with an interest rate of 0.157 percent, said Mark Altom, county treasurer.
The county received the favorable interest rate because of its "strong financial health," Rawlings said.
Davis County has little debt and an increasing value of assets, according to a recent independent audit.
Had the interest rate been much lower than what it was, Davis County Commissioner Bret Millburn said, the bonding company would have been giving the county money so it could take the notes.
The $5 million received from the notes will give the county the cash flow it needs to maintain its budget and services until property tax revenues begin to arrive in the fall, Rawlings said.
Because the county can borrow the money at a 0.157 percent interest rate, it will be able to neutralize what it pays in interest on the notes over the course of the year by making a 0.8 percent interest payment on the balance of the remaining note money the county will bank until needed, Rawlings said.
It was not too long ago that the commission would have had to approve selling $12 million in tax and revenue anticipation notes to see the county through until property tax revenues began arriving each year, said Commissioner Louenda Downs.
But a change in the management of county funds -- with an emphasis being placed on every department remaining within budget and returning surplus funds when possible -- has provided the county with additional cash flow, limiting the amount of money it needs to now bond for, Rawlings said.
With a soft freeze on hiring and through attrition, the county has built a surplus of funds, Rawlings said. Since 2009, the number of county employees has been reduced from 902 full-time equivalents to 885 full-time equivalents.
Property tax evaluation notices have already been mailed to property owners, Rawlings said, and taxpayers have until Sept. 17 to appeal their assessment. Property tax payments are due Nov. 30.
The county was assisted in the transaction by Blake K. Wade, partner with Ballard & Spahr LLP, a Salt Lake City-based finance firm, and Zions Bank Public Finance.