The St. Martinville City Council voted unanimously to authorize a $250,000 bond to be issued, to be repaid by September 30 of 2022, so the city could pay off existing debt and operating costs while it waits for its short-term cash flow to improve, according to the Daily Iberian.
The $250,000 from Farmer and Merchant Bank would be used to cover vendor payments and other costs that have been in arrears, they say, some for more than six months, due to a shortfall in revenues over projections in the 2020-2021 budget.
The budget projections included a rate hike in the city's electric and water utility operations which Mayor Melinda Mitchell refused to enact last year.
The council discussed how to address more than $400,000 in American Rescue Plan Act money that is available to cover shortfalls and expenses due to the COVID-19 pandemic.
According to bonding attorney Grant Schlueter with Foley and Juddell, the bonds would be issued at a 5 percent interest rate, and the funds from the bond could be ready as soon as Friday.
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