On June 15, 2011, Fulton County Government issued $120 million of tax anticipation notes. Bank of America was the winning bidder with a net interest cost of 0.181326%.
The interest rate was the lowest the County has ever received, and was the lowest rate received by any city or county in Georgia history. The County will save approximately $1.27 million in interest payments compared to the 2011 budgeted amount.
The low interest was due, in part, to Fulton County‚Äôs designation with the best possible short term credit ratings by S&P and Fitch. Fulton County was rated as SP-1+ and F1+, respectively, from the two agencies.
The tax anticipation notes represent 36% of expected 2011 property tax receipts and will mature on December 30, 2011. The majority of revenue in most local governments comes from property taxes, which are due in the fall for Fulton County property owners. Local governments with a calendar year budget typically make use of tax anticipation notes to manage cash flow during the year.
Fitch indicated that the highest rating is based on Fulton County‚Äôs broad economic base with above-average wealth levels. They also noted that Fulton County has healthy general fund reserves and a relatively low property rate.
S&P‚Äôs rationale included strong projected 1.4x debt service coverage at maturity. They noted that Fulton County officials have historically been conservative in preparing cash flow projections and expect to end the year with favorable budget-to-actual results.
The County‚Äôs overall credit rating is AA, which is also excellent. The strong short-term and long-term ratings are indicators of the County‚Äôs long history of strong financial management.
County Manager Zachary Williams said, "Fulton County‚Äôs emphasis on conservative budgeting allows us to offer excellent value to taxpayers. We are extremely proud of the confidence the financial community has shown in our ability to meet our financial obligations.‚ÄĚ