The press conference also dealt with a new $3 million overdraft that City Hall is getting to give it some financial breathing room. But getting that overdraft means putting up the Commercial Center, a public asset, as collateral - a move which has raised some eyebrows. Mayor Moya and her advisors addressed that this afternoon.
Alfonso Noble Reporting,
After those announcements Mayor Zenaida Moya took on the much talked about $3 million credit facility that the Belize City Council is taking on. She explained that the reasoning is: better have it and not need it than to need it and not have it.
Zenaida Moya, Belize City Mayor
"The credit facility is similar to a bank overdraft. The major difference with this facility is that the bank granted the facility at a normally lower interest rate than is the norm for overdrafts. The rate on this facility is 15%. The rate for an overdraft usually exceeds 16%. In fact the loan that the council currently has with the Alliance Bank, which was granted to the previous council, carries an interest rate of 16%. The $3 million will not be used up immediately for any particular purpose. It sits in the bank until a portion of it is needed for council business. The council then repays only the used portion.
It is only in the event that we need funds from this facility that we would draw down form it. It is only if we need monies and at this moment we do not foresee that we would be needing money if we continue the way we are going. We are cutting expenditure to the core. We are increasing revenues and this increase in revenues will at the end of the day prove significant."
And Moya says that safety net is to ensure that the council stops asking for autonomy and now simply takes it.
Zenaida Moya,
"Clearly this council will not sit idly by and be dependent on any Central Government and we will take whatever steps to ensure that we are not simply at the whim and fancy of any Minister of Central Government."
Nestor Vasquez, Financial Advisor
"The bank is satisfied that the council will easily be able to handle this operating credit, that is the correct designation that the bank gave to it in their response confirming that they would be happy to offer this operating credit to the City Council."
And bolstering the council's position today was the presence of financial advisors to the council former UDP party leader Manuel Esquivel and accountant Nestor Vasquez.
Scotia Bank will now be processing financial transactions for City Hall valued at over a million dollars a month. As for the sanitation contracts there will be a meeting tomorrow with the contractors to finalize and prepare to sign off on the contracts. As it is, the contracts are currently being paid at renegotiated rates.
