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Lack of cash prompts St. Lawrence County to borrow $12 million

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CANTON - At the urging of St. Lawrence County Treasurer Kevin M. Felt, county lawmakers reluctantly agreed Monday night to borrow $12 million to help offset a projected cash flow shortage that could jeopardize payroll for county employees.

“If we don’t get this passed, it will be difficult to make payroll next month,” Mr. Felt warned legislators during their Finance Committee meeting.

The committee voted 10-4 in favor of a resolution that authorizes Mr. Felt to borrow $12 million for the county. Lawmakers will vote on the resolution again at their Sept. 10 monthly board meeting.

Last year, the Legislature borrowed $8.5 million to cover a cash flow shortage. Mr. Felt said that loan will be paid off this week and cost the county about $83,000 in interest fees. Borrowing rates have dropped since last year and the interest on the new loan is estimated at between $80,000 and $100,000.

Several legislators questioned why the county needed to borrow $3.5 million more this time around, including committee Chair Frederick S. Morrill, D-Dekalb, who said he didn’t believe the county’s cash flow situation warranted that great a boost.

“I don’t think we need $12 million. I think $8.5 million is enough,” Mr. Morrill said. “We had very few months where our cash balance went under $8.5 million. I’m going to vote against this.”

Joining him in voting no were legislators Kevin D. Acres, R-Madrid; Scott M. Sutherland, R-Pierrepont; and James A. Bunstone, D-Potsdam.

Mr. Felt said the county’s financial picture is more precarious this year for several reasons.

He pointed out legislators took $4 million from the fund balance and used it in this year’s operating budget, which leaves less cash available to cover shortfalls.

Also, the county is owed $3 million in Tribal Compact gaming funds as well as $13 million in reimbursement payments from the state for various programs.

Outstanding state payments include an estimated $7 million for social service programs.

The county’s fiscal consultant, Fiscal Advisors Market Inc., Syracuse, advised the county to borrow $12 million, Mr. Felt said.

However, a few legislators said the blame lies squarely with their board for not making tough cost-cutting decisions including eliminating jobs and programs when they came up for a vote.

“This borrowing is bad news, but it’s not like it’s a big surprise,” Mr. Acres said. “The real responsibility lies with us and our administration and the decisions about what cuts are made.”

The board’s biggest mistake, he said, was keeping its certified home healthcare program even though it lost $1.1 million last year and could be taken over by a private company.

In other news, three people spoke during a public hearing on the county’s proposal to override the state’s 2 percent property tax cap. All three said they were against the override.

The county’s high unemployment rates and high poverty levels could worsen under greater property tax burdens, said Mark A. Gazin, a retiree from Gouverneur.

“I think raising taxes is just a merry-go-round. It puts more people in a position to need social services and then you have to raise taxes again,” Mr. Gazin said. “There are a lot of other retired people in my situation. We have to live on what we saved.”

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