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One city insolvent, another becomes a bank
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A tale of two cities. Victorville, California is getting into the banking business. The town sits halfway between Las Vegas and Los Angeles. Its largest sales tax revenue stream, Victorville Motors is in financial troubles and can not get a loan from a bank. So the city council elected to loan $200,000 to the company in exchange for a security interest in the property. The funds will be taken from the city's redevelopment fund. So where does it end? How will the city deny the next company that comes knocking on its door?
The bigger story may be that there is actually a city in the country with excess funds to loan. Back home in Eagle, Idaho there is much discussion about the financial welfare of the city which appears to be over a half million in debt. The city, led by first time Mayor Phil Bandy, took out a loan to cover its shortfall, however there have been no known plans made public on trimming the spending, leaving the city on a path to a $2 million dollar deficit at the end of the year. City officials chose to spend the budget surplus last year on employee raises and a bike park, leaving the city insolvent as building permit revenues dwindle.
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