IMPORTANT: Funding options for Dam Remediation Project
On behalf of the Town of Putnam Valley, we are providing this information regarding the funding options for the Dam Remediation Project to our RBL community. It is very important that you read the information provided. Any responses should be directed to Supervisor Annabi jannabi@putnamvalley.gov (845) 526-2121 or Town Finance Director Maria Angelico mangelico@putnamvalley.gov.
The district cost to repair the dam is $1,105,258. New York State Finance Law allows two options for municipalities: short-term loans or long-terms loan (Bond Anticipation Note(BAN) or Bond).
Loans through the public sector are not the same as loans in the private sector. Municipalities have lower interest rates, and our Town is lucky enough to have an excellent rating. Our loan interest rates have always been better than most.
We are looking at rates somewhere between 3-5% for a BAN which is usually paid off within five to seven years. However, it must be renewed yearly, which means interest rates will fluctuate.
The other option is a Bond loan, which is a 30-year loan with a flat interest rate, which could be 2-4%. It would remain that way for 30 years, no early payoff, no change.
With the project beginning in less than two months, and the process of getting the funding taking up to six weeks, time is off the essence on a decision.
There is a chance that a grant the Town was awarded may be allowed to re-allocate parts of the grant towards RBL dam project. The amount re-allocated, if possible, would be approximately $900,000, the balance of the project would be on the district. The thing about the grant re-allocation is that we won’t have confirmation until after the project begins as to whether or not it can be re-allocated towards the dam. There is a good chance it can be, but we won’t know until months after construction begins.
If the district chooses to select a Bond loan for this project, the grant cannot be used.
Maria Angelico, Town Finance Director, as well as the Town Board believe the best option for the district is to go out for a BAN for $1.2m for 1 year, and for that first year pay the interest only, which right now, as of today, may be about 4% . Meaning, the district would have to (today) pay about $48,000 in the first year of the BAN (this is a not an exact interest rate or amount, it could be tad lower/higher, but not by much). If we are not granted the re-allocation of the $900k, next year, the district will Bond the balance. If the re-allocation is allowable, it would be a huge burden off the district.
The Town requires an answer from the district no later than July 8th as there are many moving pieces the first being the Town must put out a public notice regarding the financing of the dam on July 10.
The Property Owners Association believes, due to the possibility of a grant, that the one-year BAN interest paying option is best for the entire district. Please let us know if you agree, as we need to write up a notice of public hearing in the coming days.
Mike Moculski, President
Roaring Brook Lake Property Owners Association