St. Lawrence County will borrow $10 million to cover expenses short-term
By JIMMY LAWTON
CANTON -- St. Lawrence County legislators will borrow $10 million to maintain cash flow for the next year.St. Lawrence County Treasurer Kevin Felt said this is the third straight year the county has had to borrow money to pay bills and the trend will likely continue for a few more as the county recovers from the recession.
Felt said the county has an extremely low fund balance, which mean it does not have the cash on hand to keep up with operational costs.
He said the county borrowed $8.5 million in 2011 and $12 million in 2012, but the implementation of the recently implemented five-year financial recovery plan that includes a one percent increase in sales tax will allow the county to start building back its depleted balance and reduce its reliance on borrowed cash.
“We are heading in the right direction, but its going to take years to get there,” he said.
Felt said the county’s fiscal crisis is partially to blame for the lack of cash flow, but added that slow state reimbursements have contributed to the problem. He said the county is currently owed more than $6 million from the state.
“They are not as delinquent as they have been in the past. Right now it’s around $6 million, but I’ve seen it get as high as $8.5 or $9 million,” he said.
Felt said the state has been in a cash crunch of its own for last few years, which likely contributed to the late payments. He said a reduction in state employees could also been a factor in the delayed payments.
Felt said the county is never enthusiastic about borrowing cash, but added that it is a favorable time to do so. He said the interest rate would be fixed at around 1 percent.
“Compared to previous years that is really low,” he said.
Felt said the loan will also allow the county to pay off a retirement bill early, for a savings of about $65,000. That savings amounts to more than half of the interest payment on the bond.
Felt said he believe the county will be able stop borrowing money if it is able to stick to its proposed plan, but acknowledged that it would be difficult.
“It’s realistic but it’s going to be tough to stick to it,” he said.
Approval to borrow the money was granted at a recent board meeting. Legislator Jim Bunstone, who represents the Town of Potsdam, opposed the resolution.