Prattville City Council tables loan request, scraps entire city budget

Posted by Samuel King - bio | email

PRATTVILLE, AL (WSFA) - For more than an hour, the Prattville City Council heard an earful from citizens upset by a proposal to borrow $3.1 million to satisfy a bond payment that's due on November 1st.

"I was absolutely stunned.  I could not believe this was coming two weeks after the budget was approved," Prattville resident Jon Lee Finnegan said.

And the citizens weren't the only ones who were angry. Council members demanded answers, saying they didn't know a loan would be needed to satisfy the obligation because the city didn't have enough cash on hand.

"You're telling me that the administration and yourself knew that this was going to happen," Councilman Ray Boles asked Finance Director Rod Morgan during one point in the meeting.

"That was one of the possibilities that was being discussed," Morgan answered.

"You can handle anything differently, you can always do something differently," Mayor Jim Byard said.

In the end, the council not only decided to hold off on borrowing the money, members voted to scrap the entire city budget.  They also voted to cut a million dollars from the next budget, and implement a hiring freeze.  Councilman Ray Boles voted against the original budget.

"I'm very happy, this is a step in the right direction for the city of Prattville," Boles said.  It's not going to be an easy step, it's going to be hard on a lot of people, but it's a step that has to be done."

And those who expressed themselves at the meeting say they're taking a wait and see approach.

"I think they're running scared and I think that maybe this is the turning point for honesty, openness, and fiscal responsibility,"  Finnegan said.

The council also passed a resolution allowing the city to operate day to day until a new budget agreement is reached.  The council will meet next week to decide whether to borrow the money and use it for the bond repayment or use the city's cash reserve.

Either way, the city will have to borrow money to meet obligations through the end of the year.  The city expects to have an influx of sales tax revenue and business license fees after the first of the year.

Two council members also revealed they hold small amounts of stock in River Bank & Trust, the bank of the original loan.  Council President Dean Argo said even though he has been advised that voting on the loan request would not create an ethics violation, he would abstain from voting on any request involving River Bank & Trust to avoid the appearance of impropriety.  Council members directed the finance director to investigate other alternatives to see if the city is getting the best deal on a possible loan.

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