Council Develops Borrowing Plan


(posted Feb 26)

The Speedway Town Council has developed a contingency plan to borrow from internal funds if property tax distributions do not arrive until December. Street and sidewalk improvement projects may be placed on hold this year if the council decides to pursue its internal borrowing from the fund to operate the general budget and debt service. Council President Gary Raikes explained the town's budget is operating with a shortage of cash of about $350,000 to $400,000 due to the reassessment that mandated towns to operate with 2006 levies with a 2007 budget.

Clerk-Treasurer Sharon Zishka gave cash flow projections to the end of 2008, pending the late arrival of the 2007 property tax distributions due to the reassessment ordered by the governor last year. Zishka thinks the council will need to tap into $500,000 from the roads and streets funds and $500,000 from Cumulative Capital Development fund by August. She said the $1 million may be inadequate to hold them until the end of the year and the council may have to borrow $100,000 from other funds. She expects about $400,000 to come from excise, financial institution, boats and aircraft tax revenues.

The council agreed at the last meeting they would rather borrow from internal funds than seek a capital infusion from financial institutions with interest rates. Raikes suggested talking to Street Commissioner Wendell Walters to see if a major project exists with the town's infrastructure that if delayed would have far more negative monetary consequences than avoiding an interest loan to operate the general fund.

Zishka is hoping the 2007 property tax distributions will be received in November so these temporary loans can be paid by the end of the year. However, Zishka indicated that an emergency declaration would allow the council a six month extension to repay the internal loans.

Despite the cash flow problems, Raikes does not forecast any problems for the town to borrow for the realignment of 16th Street because the town's credit rating has not changed. Clerk Treasurer Sharon Zishka said, "The town does not have an actual credit rating," but the town is in good standing with the local banks. "The only ratings we have are an A3 rating on our sewer department (SRF Bonds) and an ER3 rating with Dunn & Bradstreet which is based on the number of employees you have."

Grant consultant Dave Kieser continues to pursue more grant dollars to assist the town, especially if the potential hold on road and sidewalk projects comes to fruition. He is seeking a $250,000 grant from the Safe Walk Program. The grant provides for sidewalk improvements within two miles of a school.

Kieser feels confident that the town can receive more grant money this year because of the drop in applicants. He thinks the drop is due to other towns lacking the capital to provide a required matching amount. He is currently applying for a $450,000 grant to assist with drainage and waste water treatment plant issues.

In other matters, the council voted 5-0 to maintain the ordinance of not selling cars in residential areas, public streets or unauthorized car lots. Councilor Jeff Hartman said he received some emails to see if the council would offer a waiver a couple times a year, so residents could sell their cars on their own property.

The council agreed it would be too difficult to monitor. Hartman said the ordinance evolved out a few residents trying to operate what was more like a used car lot at their home. The council did not want the town's curb appeal to diminish again with more yard parking.

Raikes appointed Bill Jones to fill the redevelopment commission's vacancy created when Scott Harris resigned to serve as a full time executive director.

Steve Arisman and Anthony Zishka were reappointed to the cable advisory commission.