May 21, 2007 Bankrupt City?
What happens when a city owes $6.2 million to a wastewater treatment company and only has a $300,000 reserve? Ask the city of McCall in Idaho. The options are pretty grim for this small Idaho resort town:
- Take out a loan — challenge: can’t get a loan quickly enough
- Double property taxes — challenge: state law caps property tax increase at 3%
- Sell off city property — challenge: may be illegal and requires public approval
- Raise sewer rates — challenge: Idaho supreme court has ruled rate increase
- Declare bankruptcy — challenge: the debt will still be owed.
It will be interesting to see how this unfolds. You can read the Idaho Statesman article here: Residents Balk at Tax Hike for McCall debt