Lynchburg, VA - Lynchburg's public bus service has hit another speed bump: GLTC's line of credit is in jeopardy. And the bank says it is up to Lynchburg City Council to keep that line of credit in tact. But, GLTC and city council have not met on good terms.
The news came as a surprise to GLTC's board of directors. The board just learned about this line of credit issue at Wednesday night's meeting.
For a couple years now, GLTC has used a $500,000 credit line from SunTrust Bank to keep buses running and drivers paid. But, GLTC's books have been messy, and the bank's noticed. So, the bank says city council must co-sign to keep the bus company's credit flowing.
Ask board members and bus riders, GLTC is not in a place it wants to be.
"If the fares go up, it should get better," said Lakisha Clark, rides the bus.
Lakisha Clark doesn't own a car. Like many loyal riders, the blue bus is her only way from point A to point B.
"We depend on the buses. And the fares are going up, but the service is getting worse," said Clark.
And so are GLTC's finances. SunTrust Bank now wants Lynchburg City Council to promise that city government, taxpayer money, will cover GLTC's line of credit if the bus company can't pony up the money. That requires council to pass a resolution. And at least one council member can't stomach the idea.
"My business is representing the people who are paying the bill, the taxpayers. And if this isn't good enough for SunTrust, it's sure not good enough for our local taxpayers," said Jeff Helgeson, Lynchburg city council member.
For two years, using a credit line to keep buses running has been common financial practice for GLTC. But, some say it's financial malpractice. GLTC Board Member Christian DePaul voted not to crawl back to council, tail between their legs.
"The issue is that we have to re-up the line of credit by the first of May. And then we realize that it's going to be fully tapped out by the end of June," said DePaul.
City Manager Kimball Payne will recommend to council that they find the $500,000 in city coffers, so GLTC doesn't have to keep borrowing from a bank. But, where in city hall that money will come from is the $500,000 question.