Schoharie County’s stream bank chickens are coming home to roost.
County Treasurer Bill Cherry told supervisors Friday that without reimbursement from the federal Natural Resources Conservation Service for the long-troubled project, $8.5 million in short-term borrowing runs out in November.
Rolling that financing from Bond Anticipation Notes—which are only good for five years—over into serial bonds will cost the county $1 million a year in payments, Mr. Cherry said.
That’s in addition to existing debt—plus, BANs on an additional $15 million supervisors borrowed for the work, expected to be reimbursed by NRCS, will expire in 2020 and could add another $2 million to annual costs.
“Are we in trouble?” asked Middleburgh Supervisor Pete Coppolo.
“Yes, we’re in trouble,” answered Mr. Cherry.
The stream bank project is described as erosion control on four tributaries to the Schoharie Creek in an effort to prevent a repeat of 2011’s Hurricane Irene flooding with funding to come from NRCS and the state Department of Environmental Conservation.
The two have been at odds with each other and engineer AECOM since 2015 over the quality of AECOM’s work.
Negotiations to resolve the issue and hopefully, release the funding are ongoing, said County Administrator Steve Wilson, but they’re not there yet.
Without the federal and state money, Mr. Cherry said he’ll have no choice but to recommend 10-year serial bonds to cover the borrowing; he estimated annual interest at 2.9 percent.
Another catch: serial bonds aren’t like a mortgage or car loan; even if the NRCS money comes through, the county won’t be able to pay them off early.
“If we get the NRCS reimbursement, we could set the money aside in a locked box account and use it to make our serial payments,” Mr. Cherry explained, “but no, we can’t just pay them off. We’re committed.”
Fulton Supervisor Phil Skowfoe said he’s not even convinced there will be a NRCS reimbursement “because a lot of the work wasn’t done with their approval. We may only get a small portion back.”
Asked to estimate the serial bonds’ impact on taxes, Mr. Cherry said there are still too many moving pieces to even guess.
“If there was a way out, I’d recommend it,” he said.