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.


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.

Varin is in talks with Tupper Lake, Saranac Lake, Salmon River, Brushton-Moira, Malone and Chateaugay school districts to accept installment payments or delay of their tax reimbursements, which he says would free up cash to pay for the pipeline and road improvements to “avoid needless borrowing.

“I hear what Tom’s saying, but I’m doing the best I can to avoid having to borrow at all,” he said. 


The 48-mile pipeline between the Town of Norfolk in St. Lawrence County and the Village of Chateaugay will bring natural-gas service to school districts, state prisons, Alice Hyde Medical Center in Malone, county buildings, McCadam Cheese in Chateaugay and North Lawrence Dairy.

The county pledged $1.425 million to the project and recently paid St. Lawrence Gas the first $425,000, leaving the $1 million balance.   

Brainardsville Road, which is County Road 24, fell into disrepair following extensive rebuilding in 2000 and 2001, when wind-farm projects in Clinton County and eastern Franklin County were under construction.

County Highway Superintendent Jonathan Hutchins has said it would be cheaper to do all of the work in one project instead of spacing repairs across several years.

Replacing the road may add 15 years to the life of the highway, which is 10 feet wider than a county road because it’s built to state specifications and therefore more expensive to pave and maintain.

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