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Petersburg secures $6.5 million loan to keep city operations running

Posted at 10:23 AM, Dec 08, 2016
and last updated 2016-12-08 19:29:25-05

PETERSBURG,Va. -- The City of Petersburg secured temporary financing through short term notes to meet the cash needed to operate the City for the next nine months.

The Interim City Manager Tom Tyrrell said this financing is part of a short term plan to allow city functions to continue.

“It is not an infusion of cash to pay off past obligations,” he said. “We will pay our past obligations and will announce our program to accomplish those payments as “Phase Two” of our Fiscal Stability Plan.“

Wells Fargo provided the interest at an annual interest rate of 4.5 percent. The entire sum plus interest must be repaid by October 2017. That would mean the city would owe close 300,000 in interest.

“It does give us enough breathing room to continue to meet our current expenditures,” Tyrell said.

More specifically the loan allows Petersburg to pay for city payroll, current debt financing, and emergency first responder services.

“We are operating according to the plan presented to City Council,” said Robert Bobb of The Robert Bobb Group. “We are still in a crisis mode and this is not the time to interpret short term financing as a long term accomplishment.”

After securing everyday operations and essential services “Phase Two” will start in 2017 and will focus on the City’s long term debt.

A process is being organized to respond to “Phase Two” debt and to pay the remaining outstanding invoices and vendors, city leaders said.

“We need for the public and the vendors to please be patient,” Bobb said. “Our plan is working and we need cooperation from all to make it successful.”