Times Reports Michigan City Initiates Belt Tightening in Wake of Borrowing
From the Northwest Indiana Times:
For the first time, Michigan City will have to borrow money from a bank to operate due to continued delays in the countywide property tax billing.
Mayor Ron Meer, imposed a hiring freeze and other measures like restrictions on overtime to limit spending through an executive order and help the city get by the first six months of next year.
In previous years, the city used a combination of casino money and other in-house financial resources to operate until money came in from unofficial provisional bills sent out while the property tax reassessment was being corrected.
This time, though, the estimated bills are not going out, leaving municipalities throughout the county without funds until after official property tax bills go out next year.
Meer said a bank loan will be obtained because there are not enough casino funds and other money combined to cover the income loss. The loan will not exceed $11.9 million and should be enough for the city to operate through June when tax money from the first official bills is expected to start rolling in.
In-house money since 2007 was paid back without interest, but there will be interest on the bank loan.
Unlike previous years, LaPorte County Deputy Treasurer Mike Mauer said no provisional bills are going out in 2014 because the billing is nearly caught up with the official 2012 and 2013 property tax bills, both set to go out in next year.
The 2012 bills should be sent in late January or early February and property owners will be given an extra six months to pay those bills. The 2013 bills are due to go out sometime later in the year, said Mauer.
Under the executive order, no positions in most departments will be filled unless written authorization is given by the mayor. Any spending above $200 must also be approved by the city controller.
Meer said it's possible there could be $4 million to $5 million in redevelopment fund money to borrow and pay back at no interest.