TEGA CAY -- Bad timing, a few budget oversights and a tough economy combined to leave the city short on cash as the year draws to a close.
Tega Cay's City Council gave initial approval to a $400,000 loan against anticipated tax revenue at a specially called meeting Thursday night. A second vote is scheduled for Dec. 15.
City officials say Tega Cay has enough cash to meet its payroll and expenses until mid-December. Without the loan, they said, the city, which operates on a $5 million budget, would be broke until tax revenue starts rolling in after Jan. 1.
City Manager Grant Duffield asked the council to approve the loan to cover the shortfall.
"Where we find ourselves, and where the city finds itself every year, is we don't get the payment of tax revenue until the year following the start of our budget year," Finance Committee member Stewart Staples said.
The city's fiscal year began Oct. 1. The problem arises every year, but in previous years, the city was able to borrow money from the city's Utility Department. This year, Duffield said, the department does not have the money because drought-related water restrictions cut monthly bills and there is very little new construction in the city generating tap fees.
The $400,000 loan follows another -- for $250,000 -- the council approved in October. On Tuesday, the Finance Committee held a special meeting to address the cash flow problem and suggested Duffield increase a second loan request from $250,000 to $400,000 because of an additional $150,000 in payments the city has coming due.
Council members blamed themselves for reducing the amount of the loan in October, but also said at the time they didn't know the depth of the cash flow shortage they would face two months later.