Loan repayments could raise Forestville taxes by 400 percent - The Buffalo News
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Loan repayments could raise Forestville taxes by 400 percent

FORESTVILLE – A worst-case-scenario budget that increases village taxes more than 400 percent was presented at a budget hearing Tuesday that attracted a capacity crowd to Village Hall.

Mayor Kevin Johnson said he had no choice but to present the costs of loans that are due this year. He pledged that he will continue to work on obtaining revenue to reduce the debt. He said the proposed tax rate of $27.96 per $1,000 of assessed value may have to be levied to pay the loans. The tax rate would mean the tax on a home assessed for about $50,000 would increase from about $250 last year to $1,400 this year.

Residents questioned the expenses and asked Johnson if the debt would be a one-time cost.

“I want it to be a one-time cost,” he said.

The village’s operating budget is about $105,000 and has changed little.

The costs are due to two large loans. One is a $250,000 note from Evans Bank for the demolition of a building in 2009. The second loan is $150,000 for replacing a water line on Bennett State Road outside the village limits. Johnson also proposed spending an additional $46,000 this year to replace the roof on the fire hall.

Johnson said that the bank has called for repayment of both notes. He said he does not believe the village will have the leverage for any further long-term borrowing. The village also is faced with nearly $6 million for a long-term debt on a new water system.

The long-term water debt will be assessed in $90 payments due every other month, Johnson said. He said the debt was spread among all water users, including nonprofits such as churches and the school.

Johnson said he will look into trying to repay the $150,000 note with some reserves the village has.

“The bank would like that note paid now,” he said.

Village Attorney Michael Sullivan cautioned against Johnson’s making commitments to a tax rate for future years.

“We cannot make decisions about what will happen in the future,” he said.

Johnson said board members have until the end of April to set the budget and approve a tax rate. He said he hopes to lower the proposed $27 rate by using all the funds in reserve.

“We still need money to operate,” he said.

A long-term plan may involve the selling off 144 acres of village-owned land in Arkwright, where the village had used springs for a water supply.

Johnson said the sale can’t take place until June, when the springs on the land could be decommissioned and declared closed by the Health Department.

“We will try to pay some debt from reserves and then repay it from the sale,” he said.

Residents asked if there was a plan if the tax bills were not paid. Johnson said the funds would be covered by an agreement with Chautauqua County.


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