Town To Borrow $4.3 Million Short Term, Then $537,500 For Ten Years


Submitted a year ago
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norwichobserver

Money Needed For Road Repairs From Storm

The Town will ask voters at Town meeting for authorization to borrow around $4.3 million to pay for road repairs caused by the July 1, 2017 storm. It is expected that 87.5% of the repair cost will be reimbursed, 75% by FEMA and 12.5% by the State. That leaves the Town responsible for 12.5% or about $537,500. The amounts remain a moving target and the numbers to place in Warrant Article 10 will be decided by the Selectboard at its January 24 meeting. 

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Reimbursement will not be prompt. That is why the short term borrowing could be $4.3 million. The Town is exploring ways to limit the impact on the budget and taxpayers. In an email, Town Manager Herbert A. Durfee, III said:
For instance, we’re trying to look into a line of credit rather than a bond or other similar type of loan. In this instance, we would only be assessed interest on that which the Town draws down. We’re also conducting cash flow analysis to determine what amount we can float given tax payments, reserves, fund balance, etc. without jeopardizing normal governmental operations and levels of services provided.

Once reimbursement from FEMA and the State is received, the Town's current plan is pay its portion - $537,500 - back over a 10-year period. With interest, payments may be as high as $75,000 per year. That amount adds nearly 1 cent to the municipal tax rate. 

Better numbers may be available by Town Meeting. 

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