×

County to make $483K in interest from water district loan

At the beginning of this year, Chautauqua County officials were criticized by the state comptroller’s office in part because the county loaned $5.2 million to the North County Water District.

Corrective actions and a repayment plan was put in place. But county officials say the loan will generate taxpayers nearly a half a million dollars through interest.

Legislator Fred Larson, D-Jamestown, requested the Planning and Economic Development Committee hear from county Finance Director Kitty Crow about the loan to the district.

Crow met recently with the committee and stated that by loaning the money to the district, the county will make $483,000 from interest. She said had the county put that $5.2 million in a money market CD they would not have made nearly that amount.

Larson asked Crow if the county is subsidizing the North County Water District, to which she denied.

“This was kind of a point of contention with the comptroller and their initial report because I didn’t see it that way. This arrangement is to the mutual benefit because the district is going to pay the general fund $483,000 at the end of this year. If the district had issued BANs (Bond Anticipation Notes) they would have incurred closing costs and they would have been paying that interest to somebody else. So at the end of the day, the general fund is going to have $483,000 more than it would otherwise,” Crow said.

Since the water district does not have the money to pay back the county, it is getting a BAN this year so it can pay the county back in full, including the interest. That was part of the corrective action plan approved by the state.

Crow added because the county had a surplus, it was able to make the loan without raising taxes. “We had existing cash in our fund balance. Granted, that came from surpluses and prior years that were based on the tax levy and other surpluses that came to the county, but we did not add any expense to the county budget in order to have those funds available to fund this district,” she said.

Starting at $2.99/week.

Subscribe Today