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Amsterdam council authorizes borrowing $12.3 million

Amsterdam council authorizes borrowing $12.3 million

City looks to bond for capital projects
Amsterdam council authorizes borrowing $12.3 million
Amsterdam Mayor Michael Villa says the city must go forward with infrastructure improvements.
Photographer: Gazette file photo

AMSTERDAM --  The Common Council on Tuesday unanimously approved borrowing for $10.3 million worth of capital projects and a $2 million tax anticipation note.

City Controller Matt Agresta told the council the $2 million note will be used to pay off the same amount borrowed last year.

"This is the third one we've done," Agresta said.

The city has been using short-term borrowing against anticipated tax revenues to ensure the city has enough cash on hand to pay its regularly recurring bills, such as payroll. 

Agresta said roughly 80 percent of the borrowing for capital projects will be reimbursable from state grants. 

Unlike most municipalities in the state, Amsterdam has no reserve fund of unspent tax revenues, known as a fund balance. The city has accumulated an estimated $8.4 million budget deficit over the last decade.

In June, the state Legislature approved a bill allowing the city to borrow money to clear off its accumulated budget deficit and pay it off over time, but Gov. Cuomo has not yet signed the bill. The borrowed money would, in effect, act as a city fund balance made of debt, eliminating the need for the recurring short-term borrowing. 

Mayor Michael Villa said he recently wrote a letter to Cuomo asking him to sign the bill. 

"I'm sure the governor has thousands of bills," Villa said. "He has to 'call' for the bill, so that has not happened yet. So, in my letter I ask that he call for the bill and go ahead and sign it so that we can do the things necessary to take deficit financing to the next step, which is to get the comptroller in here to certify the debt, reconvene with the restructuring board and we can make the decisions we need to make," he said. 

Capital Projects 

The council approved a resolution authorizing Agresta to borrow $10.325 million for nine capital projects, several of which address a backlog of projects approved for state funding in past years.

Agresta said roughly 80 percent of the borrowing will be reimbursable from state grants. 

These are the nine projects the council agreed to borrow money for:

• $3.2 million project to replace a culvert located on Florida Avenue, and replacement of the one-lane Pioneer/Crescent Avenue Bridge at Shuttleworth Park. New York state announced in November 2018 that Amsterdam would receive grant reimbursements of $773,000 and $2.188 million for those two projects. Villa said the city is in danger of losing the two state grants if it does not bond for the money soon. "If we don't pass this resolution, they'll take away that," Villa said of the grants. 
"And we've really got to do that Shuttleworth Park project, that's a single-lane bridge," 1st Ward Alderman Patrick Russo said.

• $2.6 million for enhancing the city's pedestrian walkways, including construction of new sidewalks, crosswalks, warning signs and pedestrian signals with $2 million expected to be reimbursed by the state and federal government. 

• $1.9 million reconstruction of Church Street from Cornell Street to Clizbe Avenue. The city has received two state grants to reimburse this cost: a $900,000 State and Municipal Facilities Program grant secured by Assemblyman Angelo Santabarbara, D-Rotterdam, and a $1 million infrastructure improvement grant secured by State Sen. George Amedore, R-Rotterdam.

Church Street resident Cherylann Saul, a vocal critic of what she considers a delay in the reconstruction of Church Street, asked Villa and the Common Council Tuesday night whether the impending departure of City Engineer Richard Miller at the end of September will affect the Church Street project and Villa's projected start time of spring 2020. 

Villa said the city "has a plan in place."

Saul asked if design specifications for the reconstruction have been completed. "We haven't even gotten the money yet," Villa said. 

"So, you haven't done plans to get ready for Church Street, for construction? You have no plans from an engineering firm," she said. 

Agresta said the city paid $62,000 in 2018 for a design plan for the reconstruction project. 

Saul asked if the city will provide a town hall meeting for Church Street residents to give feedback for the project.  "This isn't like a democratic process," Villa said. He outlined the lengthy process involved. "We don't have a debate each time we have funding, open to the public," Villa said.

The council put $180,000 into a temporary repaving of Church Street in 2018. 

  • $1.2 million for the reconstruction of the Dove Creek retaining wall near St. Mary's Hospital. The retaining wall was damaged by tropical storms Irene and Lee in 2011. This will be at least the third time Amsterdam has borrowed money to address the damage to the Dove Creek retaining wall. 
  • $525,000 for the demolition of city properties.
  • $475,000 for a disinfection facility for the city's wastewater treatment plant, with $183,353 expected to be repaid by grant money.
  • $475,000 for replacement of air handling equipment for the city's public safety building.
  • $160,000 in equipment upgrades at the wastewater treatment plant.
  • $105,000 for upgrades to the wastewater system meant to bring it into compliance with state regulations. 

Fourth Ward Alderman David Dybas asked Agresta what kind of interest rates the city is likely to pay for the bond anticipation notes.  

"For the last two years we've had [borrowings] as low as 2 percent to as high as 6 percent, and whether the [grant] reimbursements factor into that from the standpoint of an investor, I can't really speak for them," Agresta said.

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