Cash flow is a problem in Terre Haute. The city is running out of money to keep daily operations afloat.
Tuesday afternoon city officials met in a special session to discuss money borrowing options. The city council approved a loan from redevelopment for $5 million that will cover the city’s immediate cash flow needs.
It’s similar to a loan the council voted against earlier this month. Normally that means the resolution can’t come before council this soon, but the loan is different enough to be re-introduced. That’s after lowering it by one million.
The issue became more immediate when the bank would not finance the tax anticipation warrant loan the council approved earlier this month. This put the city in financial bind.
At the special meeting, some council members expressed concern that there wouldn’t be enough money to pay city employees come Friday if action was not taken at the meeting Tuesday.
In a 5-3 vote the resolution passed without the council’s full support.
“I voted no previously on borrowing from redevelopment funds,” says City Council President Karrum Nasser. “We can’t continue to borrow ourselves out of the problem that we’re in, especially when we’re using resources that are meant to be a long-term solution.”
Mayor Duke Bennett says this situation shouldn’t come as a surprise to the council.
“We all thought it was going to be approved in February. Since that did not happen, we just can’t wait another week and a half,” says the mayor. “Get it behind us, so we can move on with our normal operations. So we’re moving money from one city bank account to another bank account,” says Mayor Bennett.
This resolution didn’t pass without first going through several amendments. The loan from redevelopment must be paid back to the department by August 1st, 2017.
The council also changed the resolution to give what the council calls “safe guards to transparency” that will allow them access to bank statements, along with the administration.