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March 11, 2013

Franklin County debates: Find cash or borrow?

MALONE — Franklin County must pay St. Lawrence Gas $1 million for a natural-gas pipeline by May, and Brainardsville Road needs extensive repair.

But just where the money will come from will be debated at 9 a.m. Thursday during a County Legislature Finance Committee meeting.

County Manager Thomas Leitz says the county should take out a short-term loan for $2 million at 1 percent interest, while County Treasurer Bryon Varin wants to find the money in existing sources.

Leitz said St. Lawrence County borrowed $8 million in 2011 and $12 million last year to meet its obligations, and “Essex County is there, too.”

Essex County recently decided to take out a 20-year serial bond for $4.3 million to repair seven bridges rather than use its annual Consolidated Highway Improvement Program (CHIPS) funds.

“If you’re borrowing, you’re not going broke,” Leitz said, adding that in the last several years “the county used $15 million to $18 million in fund balance. 

“We’ve lived off that.”

He said the money kept taxes down for years, but the recession since has prevented the fund balance from being replenished.

Legislators could raise taxes to build the reserves and improve the county’s cash flow or borrow $2 million for the pipeline and road work and pay $20,000 in interest.

“The question is: Is it more prudent to pay some interest or (raise) $2 million in additional taxes?” Leitz said.

DEBT REPAYMENT

Varin said the state owes the county about $6 million in delayed reimbursement payments for services provided, and he’s working with the county’s six school districts on debt-repayment options that could improve cash flow.

When property owners don’t pay their school taxes, the bills are sent to the county, which pays them in full to make the school district whole. Then the county applies that unpaid balance to the delinquent taxpayers’ next county tax bill.

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