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Loan Needed to Cover Payroll
Fri June 8, 2012
Burlington to Borrow Money
Burlington will need to take out a very short-term loan to get through the current fiscal year, which ends June 30th.
The city council has authorized the borrowing of up to $2-million to cover payroll and operations through the end of the month.
City Manager Jim Ferneau says the city will need about $700,000 to cover the final payroll of the year, so he does not anticipate needing to borrow the full amount.
He says it is good to have the authority to do so, though, in case an ongoing capital project runs into trouble.
Ferneau says there is not a specific reason for the cash-flow issue in the current budget.
“I don’t think anything is out of what was project to occur,” says Ferneau, “it is just run so tight over the last few years with population decline and very little property tax growth, the revenues have been very tight.”
The loan must be repaid before June 30, along with up to $4,000 in accumulated interest fees.
Ferneau says Burlington will use the money set to arrive from a previous bond issue to pay back the short-term borrowing.
He says cuts will need to be made to the budget that takes effect July 1 to avoid a similar situation next June.
That could include combining positions or leaving certain vacancies open.