The Olean Common Council moved quickly Tuesday night to approve borrowing $3.5 million against future revenues at the request of Mayor David Carucci.
Carucci told the Council he anticipates the need for annual issuance and sale of revenue anticipation notes to cover the cash shortfall each winter or spring caused when bills are due before real estate taxes and state aid payments arrive to fill the city's coffers.
City Auditor Janet Jones said the city will pay 4 percent interest to borrow the $3.5 million revenue anticipation note, while the money will earn at least 5.1 percent interest in a jumbo CD, for a $3,400 monthly gain.
The bond anticipation note was originally issued for a larger amount -- $2.27 million -- to make the city's state pension fund payment and meet sewer fund debt and other obligations.
When asked by Alderman Linda Edstrom, Ward 4, how many years the revenue anticipation notes will be necessary, Carucci replied, "I can give you a better answer when the firefighters contract [negotiations] are final."
Carucci said the need for revenue anticipation notes will continue until a surplus fund can be built up to tide the city over during the time when revenues are not expected.
In another matter, aldermen, in a 4-2 vote, defeated Carucci's proposal to increase $5 parking tickets to $15. Carucci said he will now prepare legislation to prosecute delinquent parking violators. Currently, a list of outstanding unpaid parking tickets totaling $19,715 would bring $92,205 in fines and penalties if all the tickets were paid.
In a 3-3 tie vote, aldermen also defeated Edstrom's proposal to solicit bids for a franchise operation of the city's recreation center.
After the vote, Edstrom said she will bring the proposal back in the future, stating, "We have the opportunity of saving $300,000 from our budget. We throw millions around and we can't even look at the possibility. It's amazing to me."