How a bail fund is helping Louisville bond holders cover the shortfall

Louisville, Ky.

— A Kentucky bail fund that has been helping to fund the city’s municipal debt was shut down after failing to raise enough money.

The fund’s funding lapsed on Feb. 17, two days after the city council passed a $1.8 billion bond package that included an 8 percent sales tax increase, a boost to city services and a property tax hike. 

“We were surprised to learn that we would not be able to meet our obligations and had to stop the fund,” said Joe Gentry, a spokesman for the Louisville City Council. 

The fund’s operations have been suspended until further notice.

The city council has since sent a letter to Louisville Mayor Greg Fischer and City Manager Bill Johnson requesting additional money from the city to help cover the $1,845 million shortfall in its bond program. 

According to the letter, the fund had raised $3.7 million since being launched in 2015, but that figure has been frozen.

The mayor’s office told the AP that the fund’s fund-raising goals were “not realistic and were not achievable,” and it has also had to reduce the size of its staff to try to keep up with the fund. 

Gentry said the fund has raised nearly $3 million, but the amount raised is not being made public. 

Louisville Mayor Greg Fisher and City Council members said in a letter that the city cannot meet its bond debt payments.

The Louisvillians Bond Fund was created by the Kentucky General Assembly in March 2016 to fund municipal bonds. 

Fischer has said that the council’s decision to cut the fund was not the result of the bond package but instead the result in part of the city and the city attorney having different ideas about how to fund a city’s debt. 

Council members said they have requested more money for the fund and have been told that the city will receive it if the fund does not raise more than $1 million a month. 

At least 10 members of the council have called on the city government to increase taxes, with at least one member asking that the revenue raise be used to fund new construction and improvements to city facilities. 

In a statement to the AP, Johnson said the city has been operating without a budget for months. 

He said that a plan for the Bond Fund to raise money from local businesses and individuals is still in progress, and that that plan has been finalized. 

 Fisher has said that the city could continue to collect bond money for two to three years, but it may be necessary to close down the fund in the coming months.

He has said the funds will remain open for those who need them and said that those who would benefit most from the Bonds Fund’s funding will be those who are currently entering into a debt restructuring. 

Follow Mike Snider on Twitter: twitter.com/mikesniderAP

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