The Saranac Lake Village Board of Trustees has given Treasurer Paul Ellis the go-ahead to put together a bond resolution for a large-scale sidewalk project.
Trustees voted 3-0 during Monday night's regular board meeting to authorize Ellis to work with the firm Fiscal Advisers to obtain an "official statement," the first step needed to secure long-term financing for the 10-year, $1 million bond.
Ellis says interest rates are currently low, and that now is a good time to secure financing for major infrastructure projects.
But some trustees expressed concern that simply obtaining the official statement needed to send the bond out to bid was too expensive. That step will cost the village $16,000 - although Ellis notes it could be folded into the bond itself.
Ellis says that in the current financial climate, banks are hesitant to pump money into projects like the village's sidewalk overhaul. Having an official statement provides a greater depth of knowledge for the bank, and can end up knocking down interest rates for the municipality.
"Banks won't bid on debt unless they have the official statement," Ellis said.
Trustee John McEneany abstained from the vote. He said he was worried that the village would expend $16,000 and be rejected on the bond.
The major concern for McEneany was that the bond could result in as much as a 4 percent annual increase to the tax rate over the life of the bond.
"I have two concerns," he said. "Number one is the automatic 4 percent increase every year, built in, for just this one line item - and I realize how important the sidewalks are - is something I would like to ponder. And I would not like the opportunity for the $16,000 to be lost, and I believe this should be a straight up and down vote on going for the $1 million, period."
Mayor Clyde Rabideau countered that entering into the bond agreement doesn't necessarily translate to an automatic annual tax increase.
"The so-called 4 percent every year is not exactly correct," he said. "The initial year may be up to 4 percent if nothing else is cut and we don't increase other revenues. It is a fixed cost that will happen every year - does that equate to 4 percent of the tax levy? Not necessarily. Nor does it relate to a 4 percent increase to the tax rate. [Those are] two different things."
Rabideau also notes that it's been a "generation" since the village put a dime into sidewalks.
"And it shows," he said. "Will we have to bite the bullet to do it? Yes. These things have been gone over many times. Vote your conscious, and we'll go from there."
Trustee Jeff Branch voted for the measure, but wondered how a potential 4 percent increase would be affected by the new property tax cap.
Ellis says lawmakers in Albany are considering an amendment that would exclude debt service from the legislation. He also notes the village is in "excellent financial standing."