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North Tonawanda to seek $4.2 million loan as holdover until tax dollars roll in

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Thu, Jan 28th 2021 08:00 pm

By Michael DePietro

The City of North Tonawanda is looking to move forward with a tax anticipation note (TAN) – a short-term bond issued by a municipal government that will be repaid with future tax collections. The reason given is that the city is in the midst of a revenue shortfall and needs stop-gap funding until it begins to receive tax revenue in April.

Council President Robert Pecoraro said the tax revenues the city was anticipating would be somewhere between $14-17 million. City Accountant Jeffrey Zelner said this would be a three-month note beginning Feb. 11 that would be paid back May 11.

In order to do this, the Common Council narrowly passed an amendment Tuesday to its tax anticipation note resolution originally adopted on Nov. 16, 2005. The original agreement allowed the city clerk treasurer to issue a TAN not exceeding $3 million. The amended agreement now sets the limit at $5 million.

Zellner said that, while the city has not utilized the TAN since 2012, he highlighted some notable uses: including $3 million in 2006, $3.7 million in 2007, $4 million in 2009, $3.9 million in 2010, and $3.5 million in 2011. He also emphasized that, while he hasn't received any quotes as to what the interest rate for this year’s TAN would be, the rates are generally very low. He cited the last TAN, in 2012, as having a 1.01% interest rate through Chase bank.

In lieu of TANs, the city has, in recent years, opted instead to shuffle funds from reserve accounts. Last year, the clerk-treasurer borrowed $2.5 million from the city’s sewer, water and capital funds since the general fund was short. Not only are the city’s reserves ill-equipped for this practice this year, but the move was pointedly criticized in a recent audit from the New York State Comptroller’s Office.

The amendment passed 3-2 with 2nd Ward Alderman Frank DiBernardo and Alderman-at-Large Austin Tylec casting nay votes. Tylec expressed concerns the resolution gives one entity in the city (the clerk treasurer) the option to move money as they see fit. Citing the city charter, he also questioned the legitimacy of the original resolution as such powers are only to be granted under emergency circumstances. Zellner offered assurances that funds would not be moved without the council being aware of it, noting the resolution merely helps being able to get the background processes moving more quickly between the city and capital market persons.

DiBernardo disagreed.

“If our limit was already set at $5 million in 2005, this discussion wouldn't be occurring and you people would go out and get the TAN to cover those costs, correct?” he asked.

“Correct,” City Clerk/Treasurer Donna Braun replied.

Pecoraro, along with 3rd Ward Alderman Eric Zadzilka, repeatedly cited the effects related to the pandemic as cause for the shortfall, with particular mention of a lack of state funding as a cause. However, the New York state audit predicted a shortfall regardless of the pandemic, but noted it would certainly worsen the city’s financial position.

They also claimed the audit recommended utilizing a TAN, but it does not. Rather, it discourages the aforementioned shuffling of reserve funds and recommends, among other things, the adoption of structurally balanced budgets.

To that point, Tylec and DiBernardo said it would be up to the council to provide leadership and continue to look for ways to reduce the city’s spending.

North Tonawanda Bike Path Connection to Empire State Trail

Dan Borcz of C&S Engineers and City Engineer Chelsea Spahr gave a presentation regarding the City of North Tonawanda Bike Path Connection to the Empire State Trail.

The project is set to include the construction of a new paved bike/pedestrian trail between the Empire State Trail in the City of Tonawanda and the existing Riverwalk Trail in the City of North Tonawanda. Overall, it also includes plans for resurfacing the existing Riverwalk Trail parallel to River Road, as well as “landscaping enhancements” including wayfinding signs, benches, and miscellaneous plantings.

Plans for the intersection of Webster and Sweeney streets include an update to the south side curb ramps to make them ADA-compliant; new pedestrian signals complete with accessible pedestrian signals (similar to other recently improved intersections in downtown NT); installation of a camera detection system to ensure all bikes, vehicles and pedestrians will be detected; and a new traffic signal controller and cabinet.

Plans for Sweeney Street include a new, 8-foot-wide shared-use path to be installed on the south side of Sweeney Street on the existing pavement. The path will be separated from traffic using flexible delineators.

The plan also calls for the elimination of approximately six on-street parking spaces on the south side of Sweeney Street (between Webster and Manhattan). Although Zadzilka expressed reservations about losing downtown parking spaces, Spahr said that, due to the proximity of the Buffalo Suzuki Strings building parking lot less than half a block away, as well as the ample parking on Webster Street, the loss is not expected to be severely impactful.

The total cost for the project is $644,800, with $76,400 for design, $521,400 for construction and $47,000 for construction inspection. Spahr said the project is almost exclusively funded through grants from New York State Department of Transportation, the Ralph C. Wilson, Jr. Foundation and the Niagara River Greenway.

Design approval is expected in February with construction set to begin in May. Construction is anticipated to be completed by August.

Vietnam Veterans Memorial Wall

Pecoraro announced Vietnam Veterans Association Chapter 77 is coordinating the transport of the Vietnam Traveling Memorial Wall from NCCC to Tonawanda. The chapter approached the city about its desire for support as the monument is moved through North Tonawanda, specifically, allowing the 52-foot tractor trailer truck to drive down Ward Road to River Road on July 20 with a police escort at 3 p.m. Additionally, Chapter 77 also envisions 300 motorcycle riders to accompany the Memorial Wall.

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