Selectmen set tax rate, use surplus and authorize up to $550,000 TAN to cover cash flow

At a December meeting the Stonington Board of Selectmen voted to set the town’s mil rate at 1.157 and to apply $150,000 from surplus funds to reduce the tax commitment for 2020.

The board also opened bids for a Tax Anticipation Note (TAN) and, after review, authorized issuance of a TAN of up to $550,000 in anticipation of tax receipts for the 2020 fiscal year. The Selectmen discussed bond counsel fees and bid comparisons and accepted the low-cost bid the board determined best met town needs; the vote to authorize the TAN passed 5-0.

Town Manager Kathleen Billings and Selectman Evelyn Duncan led the review of revenues and stressed caution because of COVID-19 uncertainty that could slow or delay tax collections. The TAN provides temporary cash flow while the town waits for tax receipts but must be repaid from the year’s receipts.

Why it matters: The mil rate and use of surplus directly affect local property taxpayers. The TAN is a standard municipal cash-management tool that gives the town short-term liquidity but increases near-term debt obligations.

What’s next: Treasurer and the Selectmen’s chair were authorized to execute the note and finalize interest terms. The board also noted it will continue watching revenue collections and may adjust plans if tax payments deviate from projections.

Attribution: Town Manager Kathleen Billings presented revenue projections; Selectman Evelyn Duncan provided analysis of surplus and mil-rate impacts.