Wachovia Bank has called in a $400,000 note floated by the commission in 2007 to cover temporary operating costs. The county owes approximately $360,000 on the loan.

On Monday, county administrator Brenda Petty asked county commissioners to approve a resolution authorizing her and Commission Chairman Lynn Sasser to borrow up to $400,000 to repay the note.

Petty said state law allows counties to borrow up to that amount if the county can repay 10 percent of the principal in the following year. The commission borrowed $400,000 in 2007 from the local banking institution and repaid $40,000, or 10 percent, in 2008 with the intention of continuing to reduce the principal.

Petty said it is general practice for counties to borrow funds to cover anticipated shortfalls in revenue.

“The commission does it often when money gets tight,” Petty said. “We pay it off and then redo it.”

Petty said the most obvious reason for the note recall is the county’s recent decision to move their deposits from Wachovia Bank to Superior Bank.

“We don’t have any of our money with them any more,” she said. “It’s all at Superior. That’s the only reason I can think of.”

Commissioners held very little discussion before agreeing to apply for a new $400,000 loan to cover the note at Wachovia by Feb. 1.

The loan was the commissioners’ only mention of money, despite the news last week that U.S. Marshals were terminating a federal inmate housing contract that was expected to generate more than $300,000 in annual revenue — revenue that had been used to balance the current budget.

“This is the worst financial situation this county has seen in years. I have never seen times this tough, not in all my 24 years,” Petty said after commissioners asked her to make a statement about the county’s finances. “In 1985, when I started, it was a similar situation, and they made the decision to make cuts and that is what (this commission has) to do, but we’re dealing with a lot more money now.”

In that crisis, the cuts weren’t enough and the county eventually got a sales tax passed to generate revenue. Alabama’s Constitution of 1901 does not give counties the power to raise taxes for themselves; all revenue measures for counties must gain legislative approval. County governments can only raise taxes for education.

Commissioners plan to hold a workshop at 8 a.m. Wednesday.