City forced to borrow moneyPublished 6:03am Wednesday, November 21, 2012
During the Russellville City Council’s work session on Monday, city clerk Kim Wright told council members the city’s financial situation was nowhere near what officials thought it was.
Wright said after the bills were approved during the meeting, the city would be overdrawn by $394,000 – something she said no one had expected when revenue projections were made this summer.
To compensate for the overdrawn funds, the council voted to approve a temporary financing agreement to establish a line of credit for $500,000 for six months at 2.5 percent interest from CB&S Bank to get the city through this billing cycle, which includes a $160,000 payroll that wasn’t included in the $394,000 the city is already overdrawn.
Mayor David Grissom, who previously served as a councilman for District 5, said the previous council hadn’t seen concrete facts or figures for the city’s financial well-being since before July, but they were led to believe the city was in good shape.
“We were told that we had plenty of money for the different projects going on at the time, namely the repaving projects and road improvements that have been going on for several months,” Grissom said.
“But when it came right down to it, the money just wasn’t there, and we had no idea it was this bad.”
Grissom said a large amount of money was spent on different projects from April through August, which accounted for the large deficit they now face.
Wright added the financial crunch the city of Russellville is facing isn’t unlike many other municipalities in the state who are also facing financial hardships.
“At the end of the day, this is just a lean time – the economy is bad, revenue is down and the money that was expected to come in just never did,” Wright said. “We’re just going to have to make adjustments and do the best we can until the revenue picks up.”
Wright said privilege license renewal notices had already been sent out in hopes that businesses would go ahead and pay these fees to alleviate some of the financial burden.
She added that it is especially important now for people to be doing their shopping inside the city of Russellville to help with sales tax revenue.
Grissom said he also talked to all the department heads and told them there could be absolutely no unnecessary spending until the city’s finances were in better shape.
“It is more important for us now more than ever to be cautious when spending the taxpayers money,” Grissom said.
He added that he hoped to have a budget in place by the end of December that would include ways the city can reduce spending and cut out unnecessary projects in the months to come.
“When I ran for office, I talked about the teamwork it would take to run this city effectively, and that’s exactly what we’ll do – we’ll work together as a team from the city council and myself to the department heads down to the employees,” Grissom said.
“No, this isn’t an ideal situation to be in, but we’ll make the cuts we need to make and get the city back where it needs to be.”