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TAN Policy

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  • 1. Policy Report Ordinance O-27-11 The Issuance of Tax Anticipation NotesThe proposed ordinance authorizes the City to issue and sell, upon its full faithand credit, tax anticipation notes (TAN) in an amount not to exceed $10,000,000.The TANs are to be issued and sold for the public purpose of funding the City’sexpenses, capital projects and any other purposes for which the City may use itsgeneral funds. The purpose of a TAN is to enable municipal corporations toaddress fluctuations in cash flow because they incur expenses all year but theyreceive property tax revenue only once or twice a year.The authority for the issuance of TANs is contained in Sections 31 through 39,inclusive, of Article 23A of the Annotated Code of Maryland, as amended (2005Replacement Volume and 2010 Supplement), and in Article VII, Section 11 of theCharter of the City of Annapolis, as amended (the “Charter”), such authorityreferred to collectively as the “Enabling Act.”The Enabling Act authorizes the City to borrow money in anticipation of thereceipt of current taxes and to evidence such borrowing by the issuance and saleof tax anticipation notes, payable as to principal and interest from said taxeswhen received. The Charter provides that the City may borrow money for anyproper public purpose and may evidence such borrowing by the issuance andsale of tax anticipation notes.For questions, please contact Jessica Cowles, Legislative and Policy Analyst inthe City of Annapolis Office of Law at 410.263.1184 orJCCowles@annapolis.gov.