The Huntington Park City Council has voted to issue as much as $1.6 million in revenue anticipation notes to avoid cash-flow problems that resulted in spending cuts last year.
The notes, which in essence allow the city to borrow against future sales tax revenue, should be sold within the next month, Chief Administrative Officer Donald L. Jeffers said.
The council eliminated 13 municipal jobs and made other spending cuts last November after officials projected that cash-flow problems would leave the city unable to meet its payroll obligations within a month. The city encountered financial problems primarily because its Redevelopment Agency was not generating as much revenue as projected and sales tax revenue was diverted to help service the agency's bond debt, officials said.
In addition to the spending cuts, the city issued $1 million in revenue anticipation notes during the last fiscal year, which ended June 30. The city is due to repay that debt in November, Jeffers said.
Early this month, the council increased fees for various municipal services, such as processing building permits, to generate an additional $120,000 in revenue a year.