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Fredonia board authorizes treasurer to seek up to $825,000 revenue anticipation notes
Summary
Trustees delegated authority to the village treasurer to issue up to $825,000 in revenue anticipation notes to cover near-term cash needs; board members were told the notes are expected to be one-time, due in June, with estimated interest in the 3%–6% range.
The Village of Fredonia Board of Trustees on Jan. 31 passed a resolution delegating authority to the treasurer to sell and issue not-to-exceed $825,000 in revenue anticipation notes (RANs). The resolution passed by roll call and took effect immediately.
The measure authorizes issuance of RANs in anticipation of receipt of sales tax, rents, rates, fees, charges and other income permitted under section 25-a of New York’s Local Finance Law, specifically calling out ambulance charges, utility bill monies and franchise fees as possible revenue sources to back the notes. The board held a brief discussion about repayment timing and interest rates; staff said the notes are a one-time payback and will be due in June, and that banks would quote interest likely in the 3%–6% range.
Why it matters: Trustees said the RAN would provide cash-flow relief before the village receives expected revenues later in the fiscal year. Board members also warned that even with the RAN, additional budget cuts will be necessary before the fiscal year ends.
Treasurer Alyssa told trustees she and the village’s financial adviser ran a cash-flow projection showing funds should be available to repay the note before the due date. Trustees asked whether consequences existed if a payment could not be made; staff said consequences would be similar to missed payments on prior equipment financing already under strain.
The resolution delegates the treasurer (the village’s chief fiscal officer) to determine the notes’ specific terms, timing and sale method. The board approved the resolution by unanimous roll call.
Ending: Trustees said they will continue budget work in coming weeks and review the village’s spending lines at the Feb. 5 workshop and regular meeting.
