By Emily Keller

line of credit

City approves taking out $35-million line of credit to maintain cash flow during COVID-19 pandemic

Apr 9, 2020 | 1:41 PM

City council has approved taking out a line of credit in the amount of $35 million to cover disruptions to cash flow caused by the impacts of COVID-19.

The decision was made at the City Council meeting on April 6.

Mayor Bill Given says the lines of credit are not uncommon but are usually in the $2-million range.

“Under the circumstances right now, with council having approved moving our property tax deadlines, and recognizing that there’s a significant amount of uncertainty, our administration thought it was prudent to have this financial instrument available to us so we would have the capability to maintain our cash flow.”

He says that they also had the option of withdrawing from the City’s investments.

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“We chose the line of credit option because the line of credit interest rate is actually lower than the interest we are receiving on investments incoming, so, the wisest financial decision for taxpayers was if we take out a line of credit at that low rate.”

If the City needs to, they do have the option of extending the line of credit, says Given.

“Ultimately the point here is to ensure that the City has the cash flow available to continue to deliver the critical services that residents count on day in and day out, and to do that in the most financially responsible manner.”