In an informal meeting last week that took place after the monthly Cannon County Commissioners meeting, County Executive Mike Gannon informed the Commissioners that there are insufficient funds to cover the cost of state loans in the County's General Fund Balance.

A letter from Sandra Thompson, Director of State and Local Finance of the State of Tennessee Comptroller's office stated that if the County repays its state General Fund Tax and Revenue Anticipation Loan's also referred to as TRANs the General fund will not have sufficient cash receipts to operate through June 30th.

The letter went on to say that based on a review of the information provided, it appears that Cannon County is experiencing significant financial stress. The state office identified some issues. For one, the County spends more cash than it receives. Cannon County does not have sufficient beginning cash to manage its cash flows for fiscal years 2015 and 2016. The County cannot meet its debt obligations for the General Fund unless it drastically restricts services and significantly cuts government operations.

State statutes require the County to maintain a cash based balanced budget throughout the fiscal year and to meet all its debt service payments. Statutes also require TRANs to be repaid no later than June 30th of the fiscal year of borrowing.

The letter went on to continue to let the County know it has two options: Repay the TRANs or Default on the TRANs. It was decided to pay back the TRANs no later than June 30th. Rather than cutting government services, the goal is to ask each of the county department heads to curtail any unnecessary spending for the rest of the fiscal year and in doing so the county should be able to pay the $322,454 General Fund TRANs by the end of June.

Source:

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