Annapolis City hall has announced that they have rep[aid a controversial $10 million line of credit which was established to meet payroll and other obligations.
While this appears to be good news on the surface, it does indicate that further lines of credit will need to be taken in the future. The release (below) also does not specify exactly how this line of credit was repaid. Was it repaid because the City was in good enough financial shape? Or was it repaid because it had to be repaid? While the City notes that it was paid off early, it does not say that Thursday is a Holiday and Friday is a furlough day.
Annapolis, Md. (11-23-10) – Mayor Joshua J. Cohen announces that the City has repaid to Bank of America the $10 million line of credit that provided a bridge during an anticipated low-revenue period earlier this year.
The LOC was fully repaid today, ahead of the deadline of Friday, Nov. 26. The City paid $5,090.78 in interest.
“The City will need to continue to rely upon temporary bridge loans until we are able to fully replenish our cash reserves,” Mayor Cohen said. “We will likely take out another temporary line of credit early next year. In the meantime, I am pleased that we met our obligation by fully repaying this line of credit in less than six months, as we committed to doing back in June. Although we have much more work to do to fully stabilize our financial situation, I am confident that we are on the right path.”
Through a charter amendment, the City Council has authorized the reduction of the City’s credit limit, currently $16 million, to $5 million on Jan. 1, 2011.