FORESTVILLE – The Forestville Village Board Tuesday agreed to consider a mortgage on the village’s timber land in exchange for a loan to help pay for the demolition of a hazardous building in the village.
The board authorized Village Attorney Michael Sullivan to start negotiations with Evans Bank. The village is faced with a debt of $247,000 borrowed to pay for the demolition of a privately owned structure that was deemed a hazard five years ago. Local and county officials had to pay for an emergency demolition and disposal of the building on Route 39. The village has started litigation against the former owners of the property.
Mayor Linda Aures and board members discovered the debt and announced late last year that the bank was seeking repayment on the note in full. No payments had been made against the note until late last year when a $3,000 payment was authorized by the village.
Sullivan said the bank is considering litigation against the village for repayment of the balance. “We need to find options to try to avoid litigation,” he said, adding that he discussed with board members either a mortgage or a lien against the timber rights on the land.
The property is 144 acres in Arkwright. It was purchased many years ago as a spring-water source for the village. Timber on the land has been sold in the past.
“As of our last meeting, the village is in default,” Sullivan said. He said that because the amount was borrowed to pay for demolition, a longer term on the loan is not possible. “We don’t have the option of extending the current loan,” he said.
“Quite frankly, they are looking for something substantial,” Sullivan told the board about the bank’s position on the amount owed.
The $247,000 is more than twice the annual budget for the village. Having taxpayers repay the note in full this year would make a huge impact on their tax bills.
Following a public hearing Tuesday, the board also passed a resolution authorizing it to surpass the state property tax cap. Sullivan said that the bank will look favorably on the action to allow higher taxes in the event that he cannot negotiate a loan against the timber property.
The board also agreed to form a budget committee and present a budget to the mayor by Feb. 28.
Sullivan saidthat the earlier budget also should show bank officials that the board is looking at finances and earnestly finding a method to pay off the debt. Village budgets are due to the mayor by state law on March 20.
In other matters, the board agreed to place a referendum on the March 18 ballot to move village elections to November. Aures said the cost of elections would be reduced by about $600 as the county covers the cost of national, local and state elections in November.