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Tuesday, May 3, 2016

PC Council approves emergency borrowing

Friday, November 27, 2009

The City Council in Pierce City held an emergency meeting on Monday to address a cash flow crisis. Aldermen authorized Mayor Carol Hirsch to secure a bank loan to carry the city for the next four months.

Hirsch told aldermen expenses for making repairs and replacing equipment at the wastewater treatment plant plus repairing water leaks had left the general fund depleted. The city did not have enough available funds to make payroll this week.

The city has money in restricted accounts covering bond issues. Hirsch had no authorization to touch that money and did not want to borrow it without council approval.

Aldermen shared the mayor's reservations and spent more than an hour reviewing the city's various accounts. They asked when sales tax, franchise fees and property tax would come in to relieve the shortfall.

In the end, aldermen approved taking out a $35,000 loan from First State Bank. The loan will have to be paid off before the end of the current administration. Hirsch was hopeful the debt could be repaid well before the April election.

The monthly electric bill for the wastewater plant alone is more than $5,000, the mayor said. She credited the abundance of breakdowns at the wastewater plant in a relatively short time with creating the cash flow problem. The amount borrowed exceeded the need, the mayor said.

Hirsch felt the council meeting was very productive, giving aldermen a better sense of how the city's finances work. Hirsch has called few emergency meetings in her tenure and felt this time the need was justified.

The council next meets on Dec. 14.

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