LUBBOCK, TX (KCBD) - The City of Littlefield faces a huge financial crisis. A recent Fitch ratings report lists Littlefield's debt as below investment grade. CNN Money called their bonds junk.
The City of Littlefield built a prison to bring in revenue and jobs. It did for awhile, but times have changed. "The prisoners we had at that time were being pulled out by the state they were from, and shortly after that we were also notified that the management company was also pulling out," said City Manager Danny Davis.
The City of Littlefield used an $11 million bond to build the Bill Clayton Detention Center, but for the past year and a half it's been empty. Without the revenue from those prisoners, they've had some problems. The city still owes $9.7 million in bonds. They have enough money to make payments for the next year, but still haven't figured out what to do after that. They hope to find a new prison population or sell the facility, but if they can't Littlefield residents worry about what might happen. "Fear that our taxes are going to go sky high, and we're going to have to move or what not," said Littlefield resident Andy Melton.
City Councilman Mike Mortin says realistically taxes will probably go up. He said the worst case scenario would be if the city paid for the bonds solely by raising taxes. That would mean doubling the tax rate. "That's what would happen if we defaulted on our note, and a Federal Judge came in, but even at that the average tax bill would go up approximately $20-25 a month," said Mortin.
However, he says that is very unlikely. "We're finding some budget cuts. We're looking at some creative financing to move some money around so that we can ease the pain of any kind of tax increase that we have to have," Mortin said.
"It's a balancing act. To try to cover our financial obligations with minimal tax increase and minimal loss of service," said Davis.
While the city is working through the budget process right now, exactly how it will balance paying back what it owes on the prison remains to be seen.
Councilman Mortin also expressed disappointment with the state legislature because he says about 2 years after they opened the prison the state pulled out of their contract, He feels the state abandoned Littlefield, and says they wouldn't have these financial problems if the state would house prisoners there again.
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