ATLANTA — Georgia’s Fulton County is readying an $80 million tax anticipation note deal for Wednesday as it contends with significant problems in its tax assessor’s office.
The deal will be sold competitively, with Public Financial Management as the financial adviser. The notes, which are noncallable, will mature on Dec. 29.
Ratings from Fitch Ratings, Moody’s Investors Service, and Standard & Poor’s are expected. Officials are planning to confer with rating analysts this week.
The county, which is home to Atlanta, typically sells Tans each year to cover general fund expenses through the fall when the bulk of property tax revenues and other general revenue collections come in. The county operates on a calendar year.
Reports have revealed that the tax assessor’s office was in disarray, threatening the county’s ability to get property tax bills out on time and therefore make timely collections. The Georgia Department of Revenue completed a review of the tax assessor’s office and recommended significant organizational and operational changes. It found that the office’s appraisers were not qualified and that some valuations were incorrect.
The department’s findings were in line with an audit. Properties have been reassessed and several tax assessor board members have been fired or resigned.
Tax bills did go out on time on May 1, but before that could be done, the board of assessors had to approve the release of 2006 reassessment notices for more than 82,000 parcels, about 26% of the total parcels in the county.
The county still must submit its 2006 tax digest to the state revenue department by June 20 for final approval. And although officials say they believes the current plan will allow sufficient time for the county to bill and collect substantially all 2006 property taxes by Dec. 1, that hinges on the state revenue department’s approval.The preliminary official statement for this week’s deal noted that if the revenue department does not approve the digest in a timely manner, the county would have to file a petition in the Fulton County Superior Court to get a temporary collection order.
One observer familiar with the matter said that although the collection issues have become a major concern for property owners, the situation for potential and existing investors might not be that significant.
“There has been some pressure on the short end [of the yield curve] from people paying their taxes so yields got pushed up,” said one market player. He added that for Fulton’s note deal, yields could be about 3.25% or less.
As county officials finish up this deal, they will also have to contend with another financial issue, and that is the formation of the county’s newest city, Sandy Springs. Voters in the unincorporated area approved becoming a city last year, and losses stemming from the move to the county’s general fund have been estimated to be about $1.5 million a year. That’s largely because of sales tax receipts that are going into the new city’s coffers.
