By Melinda Munson
The assembly directed staff on Nov. 17 to apply for a $4.3 million short-term loan.
“The unexpected expenses to protect the life, health and safety of citizens and visitors from the rockslide … have created a cash flow issue for the Municipality of Skagway (MOS),” Borough Manager Brad Ryan wrote in a memo dated Nov. 15. “The MOS will see additional ARPA revenue in January, CPV revenue in March, and expects the revenue bond monies in March; however, the high upfront cost of the rockslide and mooring projects require cash prior to receipt of those revenues. Until those revenues are available, it will be necessary to issue smaller loans to cover short-term project costs.”
Finance Chair Jay Burnham described the situation as follows.
“…we have money, and we will be covered,” Burnham said. “It’s just the amount of comfort that Heather [borough treasurer] would like to have is not there, which is a couple of million dollars for things that aren’t foreseen … We have the money in stocks, but now is not a good time to be wanting to take that money out of stocks. So, this is the most fiscally responsible thing.”
Assemblymember Reba Hylton stated the interest rate would be 4.25%.
“I feel comfortable moving forward with this, just to put us in a better place, because there are always variables that happen and money to be spent. So, I do feel like we need this cushion,” she said.
Orion Hanson, assembly member, questioned if taking out a loan could have been avoided.
“I understood last night that we haven’t applied for the bonding until this week,” he said. “That was six weeks ago, the voters approved it. That’s not the seven of us up here. That’s all the voters in Skagway that voted for it. And we haven’t applied for it. So yes, we’re sure short on money because we didn’t enact the timetable.”
Ryan countered Orion’s assertion.
“We reached out as soon as the vote passed and started that application process,” Ryan said. “It was submitted on Nov. 1. We had another meeting with them today and they’re calling a board meeting. They’ve been clear with us that this could be issued early next year, early spring. So we haven’t been dropping the ball and we followed through as we should.”
According to SMC 4.06.010, “The assembly may, without submitting the question to the voters, borrow money to meet appropriations for the fiscal year in anticipation of the collection of revenues for that year. The total of such indebtedness shall never exceed twenty-five percent (25%) of the anticipated revenues in the budget. All debts so contracted shall be paid before the end of the next fiscal year.”
The motion to pursue a short-term loan passed unanimously.