Lake City Faces Financial Crisis with $1 Million Loan

Lake City, October 17, 2025

News Summary

Lake City in Florence County is experiencing a dire financial crisis, prompting council members to approve a loan of up to $1 million. This loan aims to prevent bankruptcy while the city deals with withheld local option sales tax funds totaling $406,000. The city has cut 34 jobs and is reducing its budget by $2 million to manage the economic challenges, with dwindling reserves affecting operations.

Lake City in Florence County is facing a severe financial crisis that has led to the approval of a loan of up to $1 million by Florence County council members. This action aims to help the city avoid bankruptcy as it deals with significant economic difficulties exacerbated by the withholding of local option sales tax funds from the South Carolina Treasurer’s Office.

Lake City has seen $406,000 in local option sales taxes withheld, and the municipality relies on these taxes, collecting around $90,000 monthly from this source. The county’s loan will serve as a bridge to provide necessary funds until the Treasurer’s Office releases the withheld money. Currently, Lake City has experienced three months without these critical funds, affecting its operational capabilities.

The situation has prompted drastic measures from Lake City officials, including the elimination of 34 positions and adjustments to the city budget to reduce spending by $2 million. The city’s interim administrator has indicated the municipality is on the verge of bankruptcy due to ongoing financial mismanagement linked to misappropriated funds.

Recent comments from council members reveal that challenges with co-mingling of funds have contributed to erroneous financial practices, significantly affecting Lake City’s financial health. Reports indicate that the city had dwindled down to just $210,000 in reserves, a figure deemed insufficient for sustaining city operations amidst growing economic distress.

The ramifications of this financial crisis are affecting local businesses, with issues such as commercial enterprises struggling with trash disposal leading to overflowing dumpsters across the town. Lake City has been unable to purchase necessary supplies, specifically chlorine for its water system, which poses risks for both residents and those connected to the county’s water network.

To address immediate needs related to waste management, the City of Florence has stepped in to assist with commercial trash pickup and plans to bill Lake City approximately $4,000 for these emergency services. Lake City’s issues are further compounded by a malfunctioning commercial trash truck, which has necessitated the use of a rental vehicle to handle waste collection temporarily.

The terms of the recently approved loan entail that Lake City will repay the funds over a period of five years. In the event of a default on this loan, Florence County possesses the right to recoup its funds through future collections of local option sales taxes.

The urgent financial audit currently underway in Lake City is expected to wrap up in a few weeks, marking a critical step in seeking clarity and potential solutions for the city’s ongoing financial issues. The gravity of the situation has escalated concerns among residents and local authorities alike as they navigate these unprecedented financial challenges.

Current Financial Situation

• Loan approved: $1 million
• Sales tax funds withheld: $406,000
• Monthly sales tax collection: $90,000
• Personnel cuts: 34 positions
• Budget cuts: $2 million
• Reserves: $210,000

Consequences of Financial Distress

• Overflowing dumpsters reported
• Inability to procure chlorine for water systems
• Emergency assistance from the City of Florence
• Delay in financial audit with expected completion soon

Loan Repayment Terms

• Repayment period: 5 years
• Default measures: Recovery through sales tax collections

Deeper Dive: News & Info About This Topic

HERE Resources

Lake City Faces Imminent Bankruptcy Threat Amid Financial Crisis
Party City Closing All U.S. Stores Amid Bankruptcy

Additional Resources

• WPDE News
• Post and Courier
• KSL News
• Fox 13 Now
• Post and Courier Editorials
• Wikipedia: Lake City, South Carolina
• Google Search: Lake City bankruptcy
• Google Scholar: Lake City bankruptcy
• Encyclopedia Britannica: Lake City, South Carolina
• Google News: Lake City bankruptcy

Author: STAFF HERE FLORENCE WRITER

The FLORENCE STAFF WRITER represents the experienced team at HEREFlorence.com, your go-to source for actionable local news and information in Florence, Florence County, and beyond. Specializing in "news you can use," we cover essential topics like product reviews for personal and business needs, local business directories, politics, real estate trends, neighborhood insights, and state news affecting the area—with deep expertise drawn from years of dedicated reporting and strong community input, including local press releases and business updates. We deliver top reporting on high-value events such as the Florence Festival of Lights, Pee Dee Pride, and agricultural expos at the Florence Center. Our coverage extends to key organizations like the Florence Regional Chamber of Commerce and the Pee Dee Area Council of Governments, plus leading businesses in healthcare and retail that power the local economy such as McLeod Health and Pee Dee Electric Cooperative. As part of the broader HERE network, including HERECharleston.com, HEREColumbia.com, HEREGreenville.com, and HEREHiltonHead.com, we provide comprehensive, credible insights into South Carolina's dynamic landscape.