Grafton Township likely will shut down by mid-April because there won't be enough money to pay bills or to make the employee payroll by then, Township Supervisor Linda Moore warned Friday.
"I don't know what else you can do when you can't pay the bills, can't pay the employees," Moore said, acknowledging she has exhausted efforts to find money elsewhere. "I think the impact on the next administration can't be avoided. I mean, litigation doesn't just go away. Debts just don't go away."
Meanwhile, Township Trustee Betty Zirk said she's hopeful the township will avert its latest financial crisis.
Last month, the township tried to borrow up to $110,000 from Road Commissioner Jack Freund to cover the township's payroll and assorted bills. Moore also voided a $300,000 payment meant for Freund so she could keep the township afloat.
But Freund later reneged on issuing the loan to the township because he wanted the board to pay the road department the $300,000 first.
"Since they took the $300,000 back, I didn't want to give them $400,000," Freund said.
Thursday night, the board directed Moore to keep the $300,000 because it cannot afford to pay Freund back. After spending the balance of the money on bills and payroll, there is only $180,619.97 remaining in the town fund, Moore said.
But until Freund gets his money back, he has slammed the door on issuing a loan to the township.
"I'm done," Freund said.
Moreover, the three banks Moore contacted for loans have all turned the township down, primarily because it has yet to complete its audits, Moore said. The banks also didn't see the wisdom in issuing a loan to the township now, when a new board and supervisor will take over in May.
That leaves Moore with no option but to plan for a potential shutdown, she said.
Moore and Zirk say legal fees -- which they estimated between $400,000 and $600,000 -- are to blame for the township's financial woes. There are active lawsuits between Moore and the trustees, Moore and Freund and Moore and the assessor.
If a shutdown occurs, the township wouldn't open its doors until late May or early June, when it's expected to receive $500,000 in property taxes, Moore said.
But Zirk isn't ready to give up just yet.
An audit is now under way on the township's finances from 2008 up to now, which is expected to take between two and four months to complete. Zirk said she'll ask whether the auditors can finish audits for the 2010-2011 and the 2011-2012 fiscal years that she can give to the banks, in hopes of securing a loan based on its expected property taxes, before a potential shutdown.
"We're hoping we can find a banker who has a soft heart, sees all this and helps us out," Zirk said. "I'm still pretty optimistic."Copyright © 2014 Paddock Publications, Inc. All rights reserved.