Atlantic City Told to Abide by State Loan Terms or Risk Defaultby
Gambling hub has until Oct. 3 after missing utility deadline
Five-year budget plan needs to be filed by city as of Nov. 3
Atlantic City has eight days to remedy its breach of the terms of a $73 million state loan to keep the troubled resort town operating or risk having New Jersey terminate the agreement and withhold additional aid.
The city was notified on Thursday that it had 10 days to comply after failing to adopt a resolution to dissolve the Municipal Utilities Authorities by Sept. 15, according to state Department of Community Affairs spokeswoman Tammori Petty. The loan agreement made assets of the Municipal Utilities Authority collateral if the city can’t repay the loan.
According to the agreement, Atlantic City’s failure to comply could trigger a default. Petty via e-mail declined to "speculate on next actions" should the city not come into compliance.
Atlantic City mayor Don Guardian said last week that the city would miss the deadline, and that the city asked the state for a "reprieve." City council president Marty Small said that the council hasn’t identified any other forms of collateral to take the place of the water authority.
In addition to a potential loan default, Atlantic City has until Nov. 3 to develop a satisfactory five-year budget plan or risk state takeover of its assets and finances.