Time is up
FORESTVILLE – Time has run out for Forestville to pay off a $247,000 loan.
In 2009, the village borrowed the money to demolish a crumbling building on Main Street. At that time, Chautauqua County would no longer levy demolition costs on back taxes and the village was left with the debt.
By state law, a bond anticipation note must be paid off in five years, making the loan’s due date November of this year.
In November, the news of this completely unpaid debt came as a shock to the village board. At that time, the board made the first $3,000 payment toward the principal and interest.
Village Attorney Michael Sullivan had hoped to get special permission from the state legislature to extend the time the village had to pay back the loan, helping to spread the burden to the taxpayers over several years.
However, at Tuesday’s village board meeting, Sullivan had bad news.
“I have had several conversations with the bank about the now past due BAN. I thought we could get the state legislature to spread the payments out, but I don’t think the bank will allow that. They want to get paid in the upcoming fiscal year,” he said.
This will be a huge hit to the village’s budget, considering $247,000 is about half of the total 2013-2014 budget of $485,270.
“It has to be paid and the bank doesn’t want to wait,” Sullivan added.
He recommended the board approve a resolution for a public hearing on overriding the tax levy cap. The resolution set the public hearing for the board’s next meeting on Jan. 28 at 7:10 p.m.
“We need to prove to the bank we are making this step,” he said.
The local law, which would be number one for 2014, was also read but will not be up for approval until after the public hearing. It explained that the law would allow the board to adopt a budget in excess of the property tax limit as long as 60 percent or more of the governing body approved the local law and would take effect immediately with the filing by the secretary of state.
Sullivan said there was a note in the village’s records that last year the BAN was paid with a revenue anticipation note, the expected revenue being some kind of grant. However, he said after digging further no evidence can be found that any revenue came in to pay for the loan.
Sullivan at a previous meeting expressed that the village should have budgeted for paying off the loan every year, however no action was taken until last November.
Resident Gary Balote asked if the board had made a decision about selling the timber or land on the springs property, which previously supplied the village with water and is located in the town of Arkwright.
Deputy Mayor Kevin Johnson said no decisions have been made yet.
“We are looking at our options. We have a big bill to pay and selling that may be one way to pay toward it, but nothing is decided yet,” he said.
The board will hold its next meeting and public hearing on Jan. 28.