Flint is looking to borrow its way out of its budget deficit.
Emergency Manager Jerry Ambrose wants to ask the Michigan Local Emergency Financial Assistance Loan Board for a $7 million loan.
The term of the loan would not exceed 15 years and the interest rate would not exceed 3%. Annual payments on such a loan would be less than $600,000 annually.
That’s enough to pay down Flint’s budget deficit. At its worst, Flint’s budget deficit soared to more than $19 million in 2012.
Since 2011, a series of emergency managers have reduced Flint’s budget deficit with a great deal of belt tightening, which has included deep cuts to public safety.
Mayor Dayne Walling supports going after the loan.
“It’s shifting the burden of repayment from the General Fund to the Public Improvement Fund,” says Walling. “I think at this point in time that’s a smart decision.’
Ambrose wants the Flint city council to approve the loan application. The council may act on the application as early as Monday.
Getting the loan may speed the process of moving the city out from under state oversight.
By the end of the month, a transition advisory board may be appointed.