By ANDREA POTEET
Sunday Times Newspapers
ALLEN PARK – The city’s future is uncertain after a measure to apply for an emergency loan from the state to overcome a $2 million budget deficit and avoid running out of money before the end of the June 30 fiscal year failed.
After $4 million in tax anticipation notes, borrowing against future tax income, were closed on last week, the city planned to apply for a $2 million 20-year emergency loan to pay them back. The state required the TANs before the loan. TANs do not show up as revenue in the city’s budget.
But after the measure failed 4-3, the city’s options seem limited to an emergency financial manager or the sale of fiscal stabilization bonds, which require an additional $100,000 a year in debt service payments.
Carl Johnson of the city’s financial management firm Plante & Moran said the loan was the most attractive option, as the interest now is under 1 percent.
Councilman Dennis Hayes, who dissented on the motion along with Councilors Tina Gaworecki, Angelo DeGiulio and Harry Sisko, said he voted not to apply for the loan to reflect the wishes of his constituents, many of whom have expressed a desire not to issue further debt or millages.
He said if employee unions and retirees agreed on wage and health care concessions, the public might reconsider borrowing or a millage.
Further, he said an emergency manager might not be the worst choice for the city.
“In the absence of deep concessions or sub-contracting, we face the possibility that an emergency manager will enter to reform or void contracts to allow us to continue to offer services, directly, at a cost we can afford,” he said.