The Peekskill Common Council is expected to approve a resolution for a $3 million tax anticipation note to maintain operation until taxes are collected.
Collection for this year’s $14.5 million tax levy is scheduled to start in April.
“We still have $6 million in the bank, but the problem is a lot of that money is assets that are tied up,” said Brian Havranek, Peekskill’s acting city manager. “We need cash to fund payroll and we’re also funding some projects now before we go out for bond. In addition to the TAN, we’re doing a bond anticipation note.”
Bond anticipation notes are short term loans used to fund projects that will eventually get funded by bonding. The city Havranek said there are a number of projects that the city intends to do long-term borrowing for including the:
- The repair and painting of three water tanks in the city for $1.6 million
- Peekskill Landing
- Lincoln Plaza
- Route 6 Improvements
“Some of those interest rates [on the BAN] are 1 percent or less, so it’s very economical,” Havranek said. “What you do is take a $600,000 project here, a $1 million project there—you do them all under BANs until you get to the point where you’re ready to go out for a bond.”
Havranek said the TAN is necessary because the city is using it funds to pay some the other projects that are on tap for the city this year in addition to its payroll.
The city plans to rollover the BAN into the one that was done last year for $3.4 million to pay for costs associated with tax certiorari settlements and the central firehouse proposal. Officials hope to move forward with the BAN in about a month or so.
A PDF of the city’s resolution for the TAN is attached to this story.
