Village of Dansville
Water and sewer woes may plague Dansville taxpayers
Several items brought up at the Village of Dansville board March 13 meeting could save money for taxpayers, but one financial situation may slow future construction plans.
From investigation into the employee health insurance plan, Village Trustee Patricia Kreily has found a potential savings of about $8,100. This could be realized if three employees, with a spouse but no dependents, simply use the option of going from the family plan to two single plans as allowed by the Civil Service Employees Association (CSEA) union documents. Mayor Peter Vogt said he would verify with the Village’s insurance company that this was a permissible option before moving forward in contacting these employees.
The board was also happy with the results of Paul Bringewatt for conducting the water/sewer rates study and for only charging the village only $2,000. That the mayor said, “the cost was actually $4,760,” with Trustee Jay Griffith adding, “and he did about $6,000 to $7,000 worth of work.”
But then the problem with the Bond Anticipation Notes (BAN) came up, which led to a lengthy discussion amongst the board about tackling these short term financing tools and the ramifications of future financing of village projects, especially that of the ongoing sewage treatment plant.
At issue is the problem of having around $500,000 in BANs that are more than five years old, since this is the limit of them per state law. After this, a BAN, which is usually of a lower interest rate, at times just one percent, must be converted to a bond, a longer term note that is traditionally at a higher rate. One such BAN (all of which must be renewed annually) is from the 1990s, said Vogt.
“A lot of communities, we’re certainly not the only one, because they are at a much lower rate will continue those on. Which for the community that’s a good deal,” said Vogt by phone Thursday. “It’s fiscally wise and there’s no problems that we’ve had for which the law was established, no abuse or anything.”
A similar statement of other communities using BANs beyond the five year mark without penalty was made by MRB Group representative Bill Davis at Tuesday’s board meeting. He is heading up the design for the village’s sewage treatment plant and as such is advising the board on the details of bonding for the project.
Vogt also mentioned in the phone interview that in the two State Office of the Comptrollers audits, the issue of these BANs never came up as a problem. The real problem is that without addressing these many BANs, the village may have a hard time getting a bond for the treatment plant, which is tentativley projected to cost about $15 million.
The mayor opened the discussion on the BAN issue to the board with Griffith saying he thought “we should hit the pause button on everything except raising the water and sewer rates.”
Earlier in the meeting, Randall Shepard of the Bonadio Group spoke about the village’s first ever internal audit that was just completed. Though he said the “overall” the audit was “good news,” he said that the water and sewer rates had to be addressed. He explained that while the sewer fund was showing a surplus of $95,000, the water fund was projecting a $180,000 shortfall from the budget.
Another item connected to the BANs and water/sewer rates is a bid that went out to replace water meters in the village that has to be paid for. The low bid was $482,790 (the other bid was $606,216) that would be paid for by a BAN.
“We’re operating a deficit in the sewer [fund] and we’ve had a decline in our funds to handle water the last several years,” said Griffith. “We need to get those operating on a positive side, not to mention the paying off the debt of the sewer [fund] back to the general fund and retire the BANs. Immediately we need to stop the bleed as far as moving ahead with these other projects until we get a clear cut path to restructure our debt and either pay it off or transform it into a bond or whatever our accountants can do for us.”
The payback to general fund by the sewer fund stems from the roughly $350,000 the sewer fund had borrowed from the general fund over the past 10 years or so. This was started in September 2009 with a $10 rate hike that was followed by another $10 rate hike in April 2010, hikes that at the time, were said to have been able to pay back the funds in about three years.
He went on to specifically target not spending any more money on the treatment plant, including possibly halting any more design work on the project. Davis said that the village has spent roughly $700,000 on the design so far, which has been on the works for two years now and is budgeted at about $1 million, and is maybe two months away from completed the plans.
At stake for resolving the BAN issue is the bond rate the village would be charged; as much as six percent in a worst case scenario and four to four and half percent in the best case. Davis argued that halting the design phase at this point could mean higher costs down the road and opined that finishing the design would allow the plans to go to the Department of Environment Conservation (DEC) for approval.
Trustee Don Sylor said that at this point, the board should wait to make any concerned decisions until it meets with its accountant and professional financial advisors at the meeting schedule for March 20. A conviction the mayor shared by phone.
He didn’t see anything in this multi-administrational issue that was insurmountable, but that the best plan should be to take the time to look into the facts available and the solutions proffered.
Other items on the agenda: The DEC will soon announce what will be done with the site of the old Dansville Press lot. The village received an Sign and Façade grant larger than past years. A letter of appreciation was read for the work by Police Officer Shannon in helping out a visitor to Dansville. Thoma Development Consultants was approved as the administrator for the village’s Microenterprise Grant program for small business grants (http://dansvilleny.us/content/EconDev). And, the possibility of constructing new sidewalks in the village by using the Wayland model of having residents voluntarily pay around $40 per sidewalk block (individual section) will be looked into.