Oct 14, 2013 7:04 PM
A local bank has come to the rescue of the city of Chico.
Starting December 1st, the city can start drawing up to $5 million from a revolving line of credit with Golden Valley Bank to make sure they cover their costs and pay their employees. The bank says it was an easy choice to make, and city officials say they're grateful for the help.
“This is absolutely this is the best bang for our buck,” Assistant City Manager Mark Orme said.
The city of Chico doesn't have a lot of bucks to work with, so it's a good thing they're getting a bang.
Cash flow hits a low in the months of December and January, so Chico needs to make sure they can have their payroll, and any other obligations, taken care of.
Their usual bank refused them a loan, so a local bank offered a line of credit for those months.
“I was surprised when the city's current bank declined them for a line of credit request, and even more surprised at the cost of $150,000 for a TRAN, I knew we could do it for about a tenth of the cost,” Golden Valley Bank President and CEO Mark Francis said.
Francis said he and the Golden Valley Board didn't see it as a risk. They know they'll be paid back when sales and property taxes start coming in.
“From my perspective, if you can help the city in times like this, you have an obligation to do it. And [we] were happy to be able to help out and save them $135,000.
“I was kind of surprised at first, and I even thought are we investing here in Chico? It's kind of an odd time. But then I became supportive, and am proud of my bank that's stepping up and investing in the community,” said Mike Donnelly, an original founding investor at Golden Valley Bank.
Orme said usually cities do go with the banks they are already working with, so Chico's line of credit with Golden Valley is unique:
“So to see a local community bank step up and be a partner we need at this time, it’s just an amazing thing. They know they can bank on us; we’re going to be right here. It’s just a great partnership.”
Francis said he doesn't expect the city to have to pay back more than $5,000 in interest.
The city council will officially vote on the partnership tomorrow night, and Francis said he'll be there.
2 days ago