Saturday, August 6, 2011

Oakridge, Oregon so broke that it's asking citizens for a private loan

Oakridge is facing a serious cash shortage after its bank statement showed the City had $420,000 less than planned, prompting a city planning commissioner to solicit private loans from citizens.

George Custer began seeking “investors” soon after the City acknowledged it would be laying off eight city employees, about one quarter of the staff, to fill the budget gap, saying it was a win-win for the City and the citizens.

Custer is a volunteer planning commissioner for the City of Oakridge and claims he was not working on behalf of the City. Instead, he was soliciting loans for the City as a “concerned citizen.”

Both the city administrator and the mayor knew about the plan and considered it an option to keep the City from defaulting on its payments and going into bankruptcy.

“That was a plan B in case other things didn’t work” said Donald Hampton, City of Oakridge mayor.

Custer says that half a dozen citizens have agreed to give the City a loan if a loan from the bank does not materialize, but the list of citizens will remain anonymous for now. (more)