Prattville Denies Loan Request, Repeals Budget

Well, last night was certainly interesting for all you Prattvillians. Remember yesterday when I wrote about Mayor Byard wanting to borrow the money from a bank to make the payments on their bond issue?
http://politicsalabama.blogspot.com/2010/10/prattville-in-credit-crunch.html

The City has a $37 million budget and a $50 million debt. That's bad. They're counting on future increases in revenue to meet their financial obligations. That's REALLY bad. They're taking out short-term loans to cover interest payments on their debt. That's INCREDIBLY bad.

The Council met last night, and they were not happy. Most said they were unaware that the City had $3.1 million due shortly, and several said they would have structured the budget differently had they known. Then they denied the loan request, repealed their recently passed budget, and sent it back to Byard for restructuring.
http://progress.montgomeryadvertiser.com/article/20101020/PROGRESS/101019038/1040/progress/Prattville-council-rejects-bond-loan--repeals-city-budget

Council members not only rejected the proposed loan by a unanimous vote, they also voted in unison to repeal the recently passed $37 million municipal budget for Fiscal Year 2011 and send it back to Mayor Jim Byard Jr. and Finance Director Rod Morgan, who were ordered to rework the spending plan and reduce expenditures by $1 million.

The council also approved by unanimous vote two motions that effectively placed the city under a state of financial emergency. The motions placed a freeze on all spending except that required to fund the day-to-day operations of the city and on all hiring, with the exception of two positions for which negotiations were already under way with prospective employees.

With this, we see a tiny glimmer of fiscally responsible behavior.


We also got a rumor confirmed. It seems that two City Councilmen, Council President Dean Argo and Dr. Tom Miller, are shareholders in River Bank & Trust... the bank that would have profited from making the $3.1 million loan in question. They admitted it last night, though they claim that they don't own enough shares to cause a conflict of interest.

Yeah, right. In my opinion, if it's ONE share, that's enough.

Another thing that came out was that Mayor Byard and Finance Director Rod Morgan knew about this payment problem while the Council was working on the budget AND DIDN'T BRING IT UP.

Morgan also admitted under questioning from District 2's Willie Wood Jr. that he and the mayor had been aware since before the October meeting at which the budget was approved that there would be problems with making the loan payment.

This whole situation is incredibly screwed up. If these children keep playing so irresponsibly with their toys, the city of Prattville will pay the financial consequences for decades to come.