The Saugerties Village Board voted on Monday, May 15 to join a New York State program that offers interest on money deposited by municipalities. The Cooperative Liquid Assets Securities System (CLASS) allows municipalities to deposit money in interest-bearing accounts, village treasurer Paula Kerbert said at the village board’s regular meeting. The village can deposit money in this account and can withdraw it at any time without penalty, according to Kerbert.
The interest rate on money deposited in the account fluctuates based on the bond market, Kerbert said. The present rate is 4.9 percent. “I don’t see a down side to it,” said trustee Terry Parisian.
Trustees will hold off any activity on the account until after taxes are collected in June. The board would decide after that whether to deposit money in the system.
In another financial matter, the board voted to borrow $300,000 through a tax anticipation note. Kerbert said that she anticipates the note will cover expenses that will come due prior to the collection of taxes. The total amount due in taxes, including unpaid taxes from previous years and anticipated tax revenues for the 2023/24 fiscal year, is $2,252,072.33, the resolution states.
The village is borrowing the money through a five percent three-month note from M&T Bank, Kerbert explained. It will help cash flow until taxes come in in June.
In response to a question from trustee Donald Hackett, Kerbert said that the village may be short of money to pay all its expenses before taxes are collected. “I’m covering all the bases,” she said. “We have two bond payments coming up, a firetruck payment coming up, and payroll is always huge in May.”
Parisian asked why the resolution states that the bond is for one year, while the discussion centered on a 90-day note. The resolution allows the board to extend the repayment period to a year, Kerbert said. “Verbally, we’re saying it’s a 90-day note, but there’s nothing in here that says it’s a 90-day note with the possibility that we can extend it to a year,” Parisian countered. Kerbert said that the intention is to pay the note in less than 90 days.
Trustee Andrew Zink asked whether there is a precedent for borrowing against anticipated taxes. “We’ve never done it,” Kerbert said.