Tuesday, September 23, 2014
Inquirer Daily News

City Borrows Money, Will Pay Some Vendors

For cash-strapped city vendors, there was a little good news today.

City Borrows Money, Will Pay Some Vendors

For cash-strapped city vendors, there was a little good news today.

Mayor Nutter announced today that the city has taken out a short-term loan of $275 million from JPMorgan Chase & Co, much of which will be used to pay city vendors who haven't received checks since July.

The city will pay about $200 million of the $225 million currently owed to vendors, Nutter said. Payments are expected to start going out next week, according to a spokesman for the mayor.

But the loan has some strings attached. It's set at an interest rate of 3 percent until November 30th. After that, the rate jumps to 8 percent. Nutter said he hopes that by that point, the city will have resolved the current budget crisis and will be able to refinance. The city is currently waiting on a vote by the state House of Representatives next week on legislation that would provide budget relief.

In July, Nutter said that in an effort to preserve cash, the city would stop paying most bills, except for payroll, worker benefits, debt service and situations deemed emergencies. Moving forward, some bills will still be delayed, as the city continues to conserve cash.

About this blog
Chris Brennan, a native Philadelphian and graduate of Temple University, joined the Daily News in 1999. He has written about SEPTA, the Philadelphia School District, the legalization of casino gambling, state government, the mayor, the governor, City Council and political campaigns. E-mail tips to brennac@phillynews.com
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Jenny DeHuff is a 2005 graduate of the University of Rhode Island, where she cut her teeth in journalism. A South Philly transplant from New England, she joined the Daily News City Hall Bureau in 2013. For the past several years, she has worked as an investigative reporter exposing corruption in suburban politics, covering sometimes ghastly criminal court cases and following the people’s money and how its spent. In addition to being a dogged news hound, she enjoys reading and writing about travel, animals, Irish whiskey and aviation. E-mail tips to dehuffj@phillynews.com
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