SHAMOKIN - City council voted last week to approve the first reading of an ordinance to authorize a loan to cover "unfunded debt" through year's end.
If final approval is given by a vote of city council on the second reading, the city must then petition Northumberland County Court to commission the loan.
A resolution was adopted during council's monthly meeting on Nov. 11 authorizing a court petition should the ordinance receive final approval.
Council members say the loan is needed for the city to meet any remaining obligations - bills - in 2013.
The Department of Community and Economic Development (DCED) suggested the city take the loan as part of Shamokin's participation in Phase 3 of its Early Intervention Program.
DCED also recommends that City Hall institute a hiring freeze, place restrictions on overtime and freeze discretionary spending.
How much money will be borrowed and at what interest rate will be worked out on the advice of bond counsel, Daryl Peck of Concord Public Financial Advisors. Peck will be paid a $175 hourly rate, not to exceed $15,000.
Early Intervention is designed to stabilize a municipality's finances. The city first entered the program in 2008 and has since gone through two phases.
The third phase will create a five-year plan for the city by a financial consultant, paid for in full with a $75,000 grant from DCED.
The plan will likely include dozens of recommendations. A second five-year plan will be created on the assumption that those recommendations are followed and what the anticipated results would be. There will also be an "operational analysis" of all departments.