Charles City agrees to short-term financing upwards of $5.2 million, changes personal property tax relief rate

Charles City’s Board of Supervisors has agreed to the terms of a Revenue Anticipation Note (RAN) for a short-term revenue boost.

Board members unanimously agreed to a proposal from First Citizens as part of the short-term financing.

A presentation made by Davenport Finance showed an RFP for proposals was sent out in July for the financing. According to Davenport Finance representative Kyle Lucks, several local governments enter into RAN agreements due to a low influx of revenue in the early months of the fiscal year.

Lucks recommended First Citizens to the Charles City leadership to allow upwards of $5.2 million in financing. A fixed interest rate of 4.38 percent will apply to the borrowing, but prepayment will be allowed to pay off the loan beginning in January 2025. Lucks added that the amount should be covered through the county’s collection of taxes in December to begin the prepayments.

District 3 representative and board chairman Byron Adkins Sr. made a statement on the proposal.

“So basically what we have here is the option to deal with our cash flow and also an investment opportunity that we could get a return on,” Adkins said. “This is to make sure that that we fill a void in that time and our financial situation that we are dealing with right now.

“I believe this is a function and the most financial way to address this,” the chairman concluded.

County leaders voted 3-0 to close on the series of 2024 RAN and agree to the short-term financing. The temporary funding is tax exempt and bank qualified.

In another matter addressed by the board of supervisors, the personal property tax relief act will be changed after a unanimous vote.

According to Charles City County Administrator Michelle Johnson, each locality can receive tax relief from the state, and it is up to the board of supervisors to set the percentage.

“The current relief is 60 percent, but working with the commissioner of the revenue, we believe we can reduce it down to 29 percent for the fiscal year,” Johnson said. “We have 98 percent of the tax books done, so when the bills go out, it will reflect the personal property tax relief in bills.”

The tax relief act applies to personally owned vehicles according to state law. Johnson added that she has never seen the rate change in her 21 years of service to the county and that the move will help the county get into a better alignment with other localities. The county administrator said that the normal rate for personal property tax relief is 30-35 percent.

Charles City leaders approved the measure 3-0.