McAlester's payroll account overdrawn

Thursday, September 15th 2005, 10:23 am

By: News On 6

The city of McAlester is in bad financial trouble. The city actually overdrew its bank account last week by more than a 100,000, when trying to make both its payroll and its bond payments.

City officials found a way to make ends meet this month, but the problem is not going away. News on 6 reporter Steve Berg says city workers in McAlester are worried about layoffs.

"It's just normal to worry about what's going to happen tomorrow, especially when it concerns food and buying stuff." Allen Holloway has worked for the city of McAlester for 31 years and he's never seen the city like this.â€ It looks like some big problems there, wasn't too good. Hopefully they'll be able to work it out and take care of the ones that done wrong there."

"We're not exactly sure why the shortfall occurred." New city manager Susan Monroe just came on the job in July and now its her job to clean up a mess that she says was years in the making. She says 3 city bond projects were poorly structured and their projections show that by next year, they won't have enough revenues to make bond payments. "It's definitely been building for quite some time."

Adding to McAlester's financial woes, she says, was a highly controversial buyback program, where city officials could sell their unused vacation and sick leave back to the city, for huge sums. "The leave buyback that was giving to division heads and the city manager took, estimates are, $3-million for leave buybacks."

The city says layoffs are a last resort, but can't rule them out. In the meantime, they're looking where they can raise fees and cut costs. "The city's not bankrupt and we have a positive balance right now." But their math shows it won't last.

And Monroe says their most pressing need will be refinancing their bonds. "And we'll have to go to the voters and ask them to do that, otherwise the city will go broke."