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Annapolis To Seek Another $10 Million Line Of Credit

| July 26, 2010, 07:20 PM | 2 Comments

City To Borrow Additional $10 Million

In a surprise move, Annapolis Mayor Joshua Cohen introduced a Charter Amendment tonight to authorize the City to secure a $20 million dollar line of credit. This will be an additional $10 million on top of the loan the City has already approved. Undoubtedly this is a result of the cash crunch announced by Tim Elliott two weeks ago. At that time, he predicted the City would be facing a deficit of $4 million by the end of the first quarter of the fiscal year.

This Charter Amendment will be pushed through very quickly with public testimony being sought on Thursday with a vote to follow. Sources close to the Mayor’s office have indicated that not all of the Aldermen were aware of this pending legislation; yet the Mayor feels he has enough votes to pass it on Thursday.

Market House Negotiations

And in some not so surprising news, the Mayor announced that the City has entered into negotiations with Lehr Jackson for the lease and management of the Market House.  This was rumored to be true and somewhat confirmed by the City’s PIO last week, but denied by the Mayor. Eye On Annapolis reported something was fishy when we discovered that Lehr Jackson had not even set themselves up as a legal entity until well after their proposal was submitted.

City PIO, Phill MCGowan told Eye On Annapolis that the City was also going to be engaging outside counsel experienced in commercial real estate leasing to facilitate the negotiations.

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Category: Breaking News, NEWS, POLITICAL NEWS

About the Author - John Frenaye

John is the publisher and editor of Eye On Annapolis. As a resident and business owner in Anne Arundel County for nearly 25 years, he realized that there was something missing in terms of community news–and Eye On Annapolis was born in late spring 2009.

John’s background is in the travel industry as a business owner, industry speaker, and travel writer. In terms of blogging and social media, he cut his teeth with MSNBC.com.

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Comments (2)

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  1. Fred Shubbie says:

    What ? one step forward 20 steps back., is it possible Josh is way, way out of his league ? You can fool some of the people some of the time, josh but………

  2. Bill Kardash says:

    This may be a new record for cash burn by a municipal government. Keep in mind loan documents weren’t even signed until May 26. Now, just 60 days later, it’s “gone”?Better still is the mantra that “this is just a cash flow problem”. No kidding. Incredibly, the Mayor continues to talk about sources of revenue that “we HOPE to realize”:
    1. the lawsuit for the APD (btw, the City filed the suit one week ago .. how fast do you think THAT cash will come in?); 2. reimbursement for snow removal (est @ $300K);
    3. increase in permit fees from developers: “hello?” .. has anyone seen much new construction under way;
    4. savings from the (gulp) … Transportation Dept . The City would have to eliminate the bus company and even THAT wouldn’t solve the short-term cash needs.

    The word is the City will be out of cash at the end of July. The City’s payroll will be almost $3MM starting Aug 1.That’s $6MM beyond the $10MM before tax revenues start to come in on Oct 10. And even if the Council makes (another) Charter Amendment it won’t take effect for 50 days (about Sept 13). Where does the cash come from until then?

    The Mayor needs to understand that “HOPE” is a great campaign slogan … but it is not an asset class and has no worth on a balance sheet. Maybe it’s time for a Charter Amendment that requires Accounting 101 for all elected officials.

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