York County gets $25M TRAN loan
York County will have enough cash in hand to tide it over until tax dollars start flowing after commissioners approved a $25 million loan recently.
Called Tax Revenue Anticipation Notes, or TRAN for short, the gap financing will ensure the county will have enough cash to function through the first four months of 2016.
The money is expected to hit county coffers in the first week of January and will have to be paid back at the end of April, Jens Damgaard, a municipal finance attorney with Harrisburg-based Rhoads & Sinon, told commissioners.
The county is expected to receive about 85 percent of its county real estate revenue by April 15, county Treasurer Barb Bair said. Property owners get a discount if they pay by that date, she added.
The county has traditionally received such loans. Commissioners unanimously approved the deal at their weekly meeting Wednesday, during which they also approved the 2016 budget.
The loan: The exact interest rate the county will be charged hasn't been determined and will depend on several factors.
The five-month-long state budget impasse is one of the factors, said Lou Verdelli, of Royal Bank of Canada capital markets.
Because so many of the state's counties, school districts and nonprofits have had to rely on creditors to keep afloat during the impasse, which has kept state funding stuck in Harrisburg, some investors are leery of buying bonds from Pennsylvania.
In October, York County was forced to open a $20 million line of credit to cover expenses and was recently granted an extension to pay it off. That loan is separate the TRAN commissioners recently approved.
The high number of credit lines being opened is leading to higher interest rates for some of the affected agencies and organizations, Verdelli said.
"Investors are very aware of the budget problem in Pennsylvania," he said.
— Reach Greg Gross at firstname.lastname@example.org.