MARION – The county seat of Grant County has started the new year with virtually no money – a plight its mayor blames on a “disaster” of rising health care costs that depleted its finances.

Marion began 2012 with $2.3 million in cash reserves but ended it with just $44,000, leaving it unable to repay a $1 million short-term loan from Marion Municipal Utilities, the Chronicle-Tribune reported Tuesday.

Marion Controller Cindy Wright said the city about 50 miles northeast of Indianapolis is working to repay that loan and likely would do so “as soon as we get money.”

Wright said officials plan to see City Council’s permission to authorize tax anticipation warrants, which are temporary loans that cities use to cover expenses between seasonal property tax draws.

Mayor Wayne Seybold said the fiscal woes came mostly from health insurance, not administration overspending, and city departments were forced to use cash reserves to pay insurance bills.

Marion’s health insurance reserve fund that supports city workers’ health plans went from a $2 million deficit to a $5 million deficit last year.