BALLSTON SPA — Mayor John Romano and the Village Board voted late last month to take out a $600,000 loan from Ballston Spa National Bank to cover current expenses.
"It's a timing issue," he said. "We have expenses and bills due currently, and we won't get the revenues to pay for them until late February or early March."
Romano said the village's revenue sources include sales tax, water bills and the New York State Consolidated Local Street and Highway Improvement Program (CHIPS).
Romano said the village took out a simliar short-term loan a few years ago. Called a revenue anticipation note, the loan is pledged against revenue sources.
"It bridges the gap between bills due and revenues coming in," he said. "It accelerates the receipt of revenues the village gets so we can pay the bills."
Romano said the loan has a 1.95 percent interest rate and would not affect the village's credit rating.
The village pledged $100,000 from CHIPS funding, $200,000 from water bill and $300,000 from sales tax revenue toward the loan.
Romano said several unanticipated and unfunded mandates have had a significant impact on the village's cash flow.
The biggest expense in the village is health care.
Romano said that over the last seven years health care costs have increased 35 percent. He added that village employees who were hired after 2004 must contribute 15 to 20 percent of their health insurance costs.
Another large expense is for the village is employee pension retirement funds.
"Costs have risen from $22,500 in 2001 to $288,251," Romano said.
Worker compensation costs have also nearly doubled from $70,641 in 2011 to $136,529.
One of the ways the village saved money was by eliminating eight full-time positions, which Romano said generated $645,000 in savings.
Romano said the state tax cap, which limits tax levy increases to either 2 percent or the rate of inflation, whichever is lower, hurts the village.
"We've raised taxes when we've had to, but the tax cap puts a limit on our village," he said. "We need to look at the potential to exceed the tax cap."
Romano said he's looking forward to hearing ideas to generate revenue in the village from board members.
"The cost of business has gone up in our village and our revenues are remaining flat," he said. "We need to take a comprehensive look at where we're at financially and what we can do to generate more revenue.
"We can't continue to limp along."