A north-central Indiana city has started the new year with virtually no money — a plight its mayor blames on a "disaster" of rising health care costs that depleted its finances.
Marion began 2012 with $2.3 million in cash reserves but ended it with just $44,000, leaving it unable to repay a $1 million short-term loan from Marion Municipal Utilities, the Chronicle-Tribune reported Tuesday.
Marion Controller Cindy Wright said the city about 50 miles northeast of Indianapolis is working to repay that loan and likely would do so "as soon as we get money."
Wright said city officials plan to go before the Marion City Council as soon as its Jan. 15 meeting to request the ability to authorize tax anticipation warrants, which are temporary loans cities use to cover expenses between the spring and fall property tax draws.
Mayor Wayne Seybold acknowledged that the city had a difficult year. He said rising health costs were a "disaster" that forced city departments to manage cash flow carefully while cash reserves were used to pay insurance bills.
Marion's health insurance reserve fund that supports city workers' health plans went from a $2 million deficit to a $5 million deficit last year. Seybold said the fiscal woes came mostly from health insurance, not administration overspending.
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Wright said Marion did not exceed its budget in 2012 except for its health insurance costs. She said the city felt added financial pressure because property tax collections were less overall than had been anticipated.
According to the Grant County Auditor's Office, the state certified a levy of $14.5 million, but Marion collected only $12.8 million in property taxes in 2012.
Wright said the city believes it will be able to meet its payroll in the coming weeks despite its low cash balance.
