PETERSBURG Va (WRIC) — Wells Fargo Bank extended the City of Petersburg a $6.5 million lifeline to help get them overcome $18M of debt.
“We worked very very hard and the Bobb Group worked very hard and diligently to help us acquire this revenue,” said Mayor Howard Myers.
“If someone is willing to give them a loan that shows that they have good faith in what direction that Petersburg is going so that makes me feel a little bit better.”
So how will the city use the money?
“It will be used for cash to keep us current. It will be used to make payroll. It will be used to provide for the urgent requirements that we have for public safety. That remains priority,” said Interim City Manager, Tom Tyrrell.
Some Petersburg residents worry if the city will be able to re-pay the loan.
“If someone is willing to give them a loan that shows that they have good faith in what direction that Petersburg is going so that makes me feel a little bit better,” said Tegra Branch.
Interim City Manager, Tom Tyrrell says they had to answer a lot of questions in order to secure the loan with Wells Fargo.
“We answered a lot of questions that probably are not usually asked of an AAA organization. We were able to answer their questions and gain their confidence. They believe in Petersburg. They believe in our plan,” said Interim City Manager, Tom Tyrrell.
He says Wells Fargo *will* be repaid. The city must repay Wells Fargo Bank by October 2017.
“We will put the money into a restricted fund and pay ourselves monthly and pay them when it is due. The challenge for us really was to achieve stability with respect to our cash flow so that we bought some time for us to bring revenue in without curtailing the operation of the city,” said Interim City Manager, Tom Tyrrell.
Tyrell says it’s important for the people to know this is not a fix for the financial crisis but a way to continue running the city.
He says they are now turning to plans to restructure their long-term debt and move the city toward financial stability.
“For phase two we are really going to restructure our long-term debt that our bond portfolio will grow probably from $53M to somewhere between $75 and $80 million. We will stretch out the payments. We will issue a bond, and we will use the proceeds to pay the vendors so that we can pay them what we actually legitimately owe them,” said Interim City Manager, Tom Tyrrell.
This is a developing story. Stay with 8News online and on air for the latest updates.