Deadline passes, Riverdale draws from reserve

By Justin Boron

Riverdale drew on its reserve fund Monday as a deadline passed for the mayor to approve a line of credit intended to cover the city's budget shortfall, the finance director said.

In working through its budget constraints this year, city officials opted to end the practice of using the city's reserve account to run the government.

But that goal took a hit Monday when the city failed to gain a $1 million line of credit from a bank before it had to write checks to pay bills and its employees. To cover its immediate expenses, the city took $287,000 from its $1.1 million reserve fund, said Tom Pence, the city's finance director.

Council members and city officials met Friday to discuss the matter but Mayor Phaedra Graham did not attend the meeting.

She said she boycotted the meeting because citizens were not given enough time to become aware that it had been scheduled.

"It appeared to be a direct shutout of the people," Graham said.

City Manager Iris Jessie notified the News Daily of the meeting in the time required by Georgia Open Meetings law. The News Daily also published an announcement of the meeting in its Friday edition.

Despite of the City Council's affirmative vote to take out a line of credit, Graham blocked the bank note, which would be used to cover expenses until the city's tax revenue begins to arrive in October.

Graham said management of citizens' money needed to be improved before it looks to take out a loan.

"City officials need to review the amount of personnel that is in the city and how funds have been allocated for projects in the past," she said.

Graham added that at least three times she has asked for a forensic audit of the city's finances and the council has declined to give her one.

Council member Michelle Bruce said in not signing off on the loan, Graham risked losing the faith of the city's employees, whose morale had already been depressed by budget constraints.

"If the employees don't have a paycheck . . . the employees will quit in a heartbeat," she said.

Riverdale grappled with a tight budget this year. At the expense of its employees, the city had to cut costs to avoid using money from the reserve fund to run the government, which it now may do.

The city also has reduced the number of its personnel and did not give annual pay raises to its employees this year.

Pence said when revenue does start coming, the reserve would be replenished.

He also said the mayor could still sign off on the line of credit because the bank gave the city an extension.

But Graham said the city would need to demonstrate that it was managing money "within reason" before she would change her mind.