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Village of Forestville faces doubling of tax rate in new budget

FORESTVILLE – The proposed tax rate approved for the Village of Forestville will more than double the current rate.

At $10.87 per $1,000 of assessed value, it is more than two times last year’s rate of $5.13, but far less than the $27 rate proposed when the budget process began earlier this year.

Trustee Mindy Borrello voted against the proposal. She said the many senior citizens can’t afford the new rate. She voted in favor of the motion approving the county loan to the village and in favor of the tax levy.

Members of the Village Board met Tuesday in a special session to approve their budget. Mayor Kevin Johnson opened the meeting with praise for Village Clerk and Treasurer James White. The mayor said that White coordinated the effort to get a loan from the county.

The financial crisis arose when village leaders found out late last year that they had a five-year bond anticipation note of $250,000 due to the local branch of Evans Bank. The note had been borrowed to cover the cost of demolishing a large building in 2009. The privately owned building on Route 39 was deemed unsafe and an emergency demolition was ordered by local and county code enforcement officers.

A second part to the financial crisis was when Evans Bank called in a note for $150,000, which was taken out to pay for water-line construction. The combined $400,000 in principal for the two loans plus interest and other operating costs had village leaders facing an increase of 445 percent.

The new budget, which was unveiled Tuesday, totals $658,223. Expenditures will be offset by the loan from Chautauqua County, the tax levy and a fund balance. The total tax levy is $215,500. The new levy is up by 118 percent from last year.

The county bailout of $150,000 comes with a 3 percent interest payment over a five-year term. The first payment is due in June 2015 and would be for $30,000 plus about $4,500 in interest.

Village Attorney Michael Sullivan said that if the village fails to make payments on the loan, the county will have the right to hold back sales tax payments to cover the note. Also, as part of the agreement, village leaders have to agree to look into funding for a study of possible dissolution of the village. The study could also find other cost-saving measures like shared services.

“My goal is a fiscal plan so we can be sustainable,” said Johnson, who would not promise that taxes would be reduced after the debt to the county is paid off and added that once the bill is paid it may be replaced by other costs.

The mayor vowed that he would look into wrongdoing by past village officials, including former Village Attorney Michael Bolander, to determine if there is a way to recover funds.

The council meets next on May 13.

Johnson, who only served one year as a trustee and was just elected mayor, said he hopes the board meetings going forward can include discussions about issues so that new trustees can be made aware of problems. None of the current board members were serving when the 2009 loan was received.

Johnson said he will also welcome the new committee, which includes County Executive Vince Horrigan, which will look into finances and plans of the village and make suggestions.

The village’s fire hall roof replacement, estimated to cost $50,000, was reinstated in the budget. Johnson said State Sen. Catharine Young, R-Olean, will pursue funding for the project.