Mayor Nutter just announced that the city expects to secure a $275 million loan that will enable it to repay millions of dollars owed to thousands of vendors as soon as next week. Many of the vendors have not been paid since July.
The short-term loan is intended to help resolve the city's cash-flow problems. It is being financed by J.P. Morgan, which will in return seek a 3 percent interest rate through Nov. 30, and an 8 percent interest rate after that.
But Nutter said he expects to refinance the loan quickly through a separate bond transaction that the city would be able to pursue after the state legislature approves pending legislation to free up $700 million in future revenue.
At today's news conference, the mayor also reiterated his hope that the state House would approve the legislation - which includes a sales tax hike for the city - on Sept. 8, as House leaders have indicated. The municipal unions are opposed to the legislation, and are actively lobbying lawmakers to strip out provisions they say would limit collective bargaining on pension issues.
Given the uncertainty, Nutter is moving ahead with other steps, including letters being sent beginning Sept. 10 to residents, vendors and others in the city about possible reductions in city services such as trash collection. Those reductions would begin Oct. 2.
In addition, on Sept. 10, the city intends to submit a new pension plan for future city union workers to the state Public Employee Retirement Commission. That plan must be submitted under the pension legislation.
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It's ridiculous that the mayor is reducing trash collection when he hasn't stepped up collections of things like the $425 million in overdue property taxes owed the city for years and year that Kerkstra wrote about, all of it against property that could easily be sold at sheriff sale. There's forfeit bail to be collected; there's cuts to row offices to be made, there's AVI to be implemented to make property tax assessments legal and market rate -- all these things need legislation in Council now with the mayor lobbying as hard for them as he did for the sales tax hike. Plan C is still go. Nutter's political survival now depends on him making the cuts to the smallest base of voters, rather than trying to cut basic city services everyone uses. Cut the arcane things Philly offers that other counties in the state don't do.— CleanupPhilly- Weren't we also supposed to get a notice of our property tax assessments in August? This is not a notice of hike in property tax, but notice of changes in assessments, and it hasn't come out. This is another clear form of revenue that will make the jump to AVI less painful for about half of city owners, and Nutter hasn't done it.— CleanupPhilly
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