SCHOHARIE COUNTY : County adding debt to rebuild $19M needed for offi ces, jail damaged by Irene
A year ago, Schoharie County prided itself on being the only county in New York state with no debt.
It took just a few days of rain from tropical storms Irene and Lee to change that.
The county’s Board of Supervisors will consider borrowing $19 million at its meeting today, a move that will bring flood-based debt up to $29 million.
County Treasurer William Cherry said two projects — rebuilding the county offi ce building on Main Street and the public safety facility on Depot Lane, both in the village of Schoharie — will require borrowing.
“We don’t expect this to be a long-term burden on taxpayers. We’ve got to have the money on hand to pay these contractors,” Cherry said Thursday.
Reconstruction work will cost $5.6 million at the county office complex and fl ood-proofi ng work to go along with it will cost another $3.5 million.
The public safety facility will cost about $6 million to rebuild, with another $4 million needed for fl ood mitigation.
Cherry said the county is expecting to get much of this money back, but contractors require payment periodically and at a faster rate than the county can expect New York state and the Federal Emergency Management Agency to deliver reimbursement.
“The truth is, it takes a year, sometimes longer, to get these reimbursements from FEMA,” Cherry said.
The county needs money on hand to pay social service benefits and employee salaries, and Cherry expects money will be “flowing out like a torrent” for the next six months.
The county borrowed $10 million in 2011 to get fl ood-ravaged roads and bridges put back together and put $8 million in county funds toward the work, as well. So far, about $6.5 million has come back in the form of reimbursement from FEMA and the state.
There is a “plus” in terms of the debt — Cherry said interest rates for the debt could be 1 percent or even lower.
If the borrowing is approved by the county board today, the money will be placed in an interest-bearing bank account that will yield some return — that interest rate isn’t yet clear, but it’s “awfully low, too,” he said.
Cherry sees it as good debt because he doesn’t expect county taxpayers to feel any pinch, so long as state and federal agencies provide timely reimbursement.
“Being debt-free was, I think, a badge of honor for Schoharie County because we didn’t need to borrow money. We were not borrowing today and kicking the can down the road,” he said.
“In this case, this is good debt. We have the opportunity and the helping hand of the state and federal governments to rebuild our infrastructure after the fl oods.”