Schoharie County supervisors agreed, in a split vote Friday morning, to borrow an additional $15 million to continue the controversial streambank rehabilitation project.
While supervisors agreed to borrow the money Friday, the spending of the $15 million will have some strings attached.
Once the bond is issued, probably in two or three months, it will require a two-thirds vote of the board--and not a simple majority--to release any of the funds. Supervisors cannot make any payments until after a suspension by the federal NRCS is lifted.
County Attorney Mike West called it a "bond the money, hold the money" approach.
Supervisors had agreed at their meeting on November 20, also in a split vote, to borrow $15 million more to pay contractors and keep the work going on the project. Work ceased around September 4 after NRCS, which had agreed to fund 75 percent of the work, suspended payments in June.
AECom, the firm overseeing the project, and county officials are hoping that suspension will be lifted by February and funding will be resumed.
The county has already borrowed $8.5 million for the project.
Once again, supervisors got conflicting advice on whether to take out the loan.
Mr. West told supervisors that if they do not borrow the money and lawsuits ensue from unpaid contractors and landowners with half completed projects, "the county could be in the hole for $25 to $30 million."
Whether to borrow the money, he added, "is a risk management issue."
Bonding the money is a "happy compromise," and will let contractors and the NRCS know that "money is in the pipeline," he continued.
On the other hand, county Treasurer Bill Cherry once again warned supervisors about the dangers of borrowing more money for the project.
Since the NRCS suspended payments, he told them, supervisors have been told that fruitful meetings have been held and that the suspension would be lifted soon and that was almost six months ago.
The cost of the project, Mr. Cherry noted, has ballooned from $21 million to nearly $30 million.
If the NRCS lifts the suspension, he added, a bond is not needed.
If the county borrows the money and the suspension is not lifted, the burden would be on the county and it would "cripple county finances and increase taxes" long after the current members of the board are gone, Mr. Cherry said.
The interest payment will be $175,000 to $200,000 for the first year, according to Mr. Cherry.
New county Administrator Steve Wilson agreed with Mr. West.
Not moving forward with bond would "put us at greater risk" of greater payouts in the future, Mr. Wilson told supervisors.
"Going ahead with the bond is less risky than not doing it."
Cobleskill Supervisor Leo McAllister praised the compromise.
The bonding, he added, solves the county's responsibility and if the suspension is lifted, the contractors get paid. If the suspension is not lifted, the county does not use the money.
Voting against the bonding resolution were: Bill Federice of Conesville, Sandra Manko of Sharon, Mr. Milone, Mr. Skowfoe, and Shawn Smith of Blenheim.