COLUMBIANA COUNTY Commissioners to consider borrowing from debt fund

The county has nearly half a million dollars in overdue bills from 2000.
By NORMAN LEIGH
VINDICATOR SALEM BUREAU
LISBON -- Lingering financial burdens from last year's budget crisis may force Columbiana County officials to borrow to solve a cash-flow shortage.
Commissioners are expected today to consider whether they will borrow $1 million from a special county fund earmarked to pay off long-term debts.
Officials say they may borrow from the debt fund for operating needs, as long as they pay back the obligation with 3 percent interest.
The county would take about two years to pay off the debt, Auditor Nancy Milliken said Tuesday.
Prompting the loan consideration is the county's having little cash to meet financial obligations.
Those include nearly $500,000 in outstanding bills from 2000, and about $2.3 million in first-quarter 2001 bills and expenses now coming due, Milliken explained.
Major cost: About $411,000 of last year's overdue bill is for housing prisoners from October through December at the county's privately operated jail.
Prisoner housing costs also are among this year's first-quarter expenses. Also needed is cash to continue meeting payrolls, Milliken said.
"We want to get by with borrowing as little as we can," Commissioner Jim Hoppel said.
Borrowing $1 million won't pay all the county's bills. But it will allow the county to "limp along" until money from the 1 percent sales tax adopted in November starts arriving in full force next month, Milliken said.
In April, the county may receive about $500,000 in sales tax revenue.
Money is tight now because the county ended 2000 strapped for cash, and bills went unpaid.
The county's financial bind was the result of the loss in May 1999 of the county's 1 percent sales tax.
Before voters restored it, the county budget was strained to the point that there wasn't enough money to meet expenses.
If commissioners borrow $1 million, they'll pay it back using sales tax money.
Here's the advantage: By borrowing from itself, the county saves some of the financial expenses it would incur if it were to get a commercial loan, which also would have higher interest, Milliken said.
The debt fund from which the money would be borrowed has a balance of about $1.4 million.
Taking $1 million from it won't impede the county's ability to pay off its long-term debts, Milliken said.