By CAROLINE MURRAY
PERTH -- At a town board meeting Thursday, a resolution passed to authorize Supervisor Gregory Fagan to renew a Bond Anticipation Note for the town's new highway garage.
Before the councilmen approved the proposal, Fagan said he made the decision to pay $7,000 in interest instead of making a principal payment.
In anticipation that the town's sales tax would fall short this year, Fagan said he did not feel comfortable digging into the fund balance to pay an installment on the loan.
He said the board could not maintain the town's current tax rate if they used fund balance money to cover the cost.
"It is unfortunate that we couldn't ... I would have rather made the payment, but with a shortfall of sales tax it doesn't make sense to do that and jeopardize our tax rate," Fagan said.
Town attorney Carmel Greco said NBT Bank issued the town a $383,260 bond anticipation note last June for the new garage.
The total cost for the highway garage was approximately $420,000.
Fagan said the loan caused the town's tax rate to increase this year by 70 cents. With the bond anticipation note, the board can pay the bank back in a series of increments throughout the next five years.
Fagan said next year the board has to make a payment other than interest.
With a roll call vote, the councilmen unanimously approved to pay interest this year.
Fagan said the bond anticipation note is a five year plan. At the end of the fifth year, the town could enter into a serial bond with the bank to pay the remainder of the bond's balance.
Fagan said while planning next year's spending plan the board will budget for a loss in sales tax more accordingly.
The town's shortage of sales tax can be attributed to the new WalMart in Gloversville. The city does not share its sales tax with the rest of the towns in Fulton County. Because of this loss, the town's within the county saw a dramatic drop in sales tax this past quarter.
"My projection is we are not going to make what we budgeted this year," Fagan said.