FORESTVILLE - The Forestville Village Board took steps at its meeting Tuesday in an attempt to keep its unpaid $247,000 loan out of court.
The village is currently in default of a $247,000 loan taken out in 2009 to cover demolition costs. According to Attorney Michael Sullivan, the village took out a bond anticipation note, or BAN, which is typically utilized by municipalities as short-term financing until a long-term loan is secured. However, no long-term financing was taken out and about two years ago the BAN was converted to a revenue anticipation note in anticipation of a grant from a state agency.
According to Sullivan, this revenue was never realized by the village and the time to pay back a BAN for demolition, according to the state, is five years.
Resident and former village clerk Marcia Petersen asked why the village cannot find some other kind of long-term financing for the loan.
"It will not change the nature of the project the BAN was used for," Sullivan explained.
He said the bank is ready to take the village to court for the unpaid debt, but hopes to be able to convince them of the village's intention to pay in the next budget period.
At the meeting, a public hearing was held to override the tax levy cap and was unanimously passed by the board with Trustee David Bishoff absent.
Sullivan said this is a positive step he is going to bring to the table to show the bank that the village is able to raise taxes to repay the debt.
However, another resolution was passed that may affect whether the village must raise taxes to pay off the loan.
The resolution would allow Sullivan to negotiate with the bank using the springs property and timber in Arkwright as collateral.
Petersen encouraged the board to consider all its options with the property and said she is disappointed the village stopped efforts started by the previous board to negotiate with the county on demolition tipping fees.
Sullivan said after the bank did not receive the revenue promised from the anticipated grant, it now needs more proof that the village will repay its debt. The board passed the resolution to allow Sullivan to negotiate with the bank, but any decision will need further board approval.
The board also approved formation of a budget planning committee with Deputy Mayor Kevin Johnson, Trustee Ron Lineman, Clerk/Treasurer James White and two to three members of the public. This committee will present a budget to the mayor by Feb. 28. Sullivan said this is another positive step to mention to the bank, that the village is moving up the time it expects to have a budget completed from the end of March deadline.
The board also held a public hearing for putting an election date change to November on the ballot on March 18.
Petersen said she thinks there are reasons to keep the election day in March.
"It is nice just to have that period of time to think about local people, not all the other officials seeking election. The state set it up that way for a reason," she said.
Sullivan pointed out with more time to make and understand a budget things like the $247,000 BAN may have been discovered sooner. Another resident also said the village needs to start thinking of ways to save money and the $600 on the election is a start.
The village will meet with Northside Water District customers today at 7 p.m. in the village hall with a petition to send to the Hanover Town Board.
The board will hold its next regular meeting on Feb. 11.