U. awaiting terms of city loan proposal

The University is waiting for legal documents which would state the terms of a short-term $90 million loan it and other non-profit institutions might advance the city, Treasurer Scott Lederman said yesterday. Lederman added the University has agreed only "to consider seriously" a plan to loan the city. The non-profit institutions are awaiting the documents to ensure there will be adequate funds to repay the loan on time, Lederman said. He added the city and the non-profit organizations have not reached an agreement over how much interest the non-profits would charge the city, only saying the University was considering an amount of money "bigger than a breadbox." Lederman also said the deadline for the city to close a deal with the non-profit institutions is by the end of next week. The University was approached a few weeks ago to participate in the $90 million loan that several non-profit organizations are offering the city, Senior Vice President Marna Whittington said Monday. The University still has not decided how much it will loan the city. The money is critical for the city to maintain an adequate cash flow until the city's oversight authority is willing to issue bonds on the city's behalf at much lower interest rates than the city itself could offer. City Council voted Saturday against giving PICA the ability to monitor contract negotiations -- a power required by the state legislation creating PICA. Lederman said he has been in touch with city representatives on a day-to-day basis but added he does not know when all of the non-profits will meet together with city officials. The officials and representatives of the non-profit organizations last met Friday. Lederman also said more non-profits have shown interest in loaning the city money over the past few days. Last November, the University and two other private corporations prepaid $10 million in wage taxes when the city faced insolvency -- an amount which covered the University's obligation through June.

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