FORESTVILLE, NY (WGRZ) - As he prepared to be sworn in as Mayor of this Chautauqua County village of 700 residents Tuesday evening, Kevin Johnson acknowledged the financial crisis facing the village were daunting.
That may be an understatement.
"I know there's problems here but I think we can work through them and get on with it," Johnson told WGRZ-TV, regarding a money mess that, according to Johnson has been "many years in the making", and one which has the village proposing a budget containing a 445% tax increase for residents.
Johnson, who becomes Forestville's 3rd mayor in the past two years, says the problems began in 2009, when the village borrowed $250,000 for the emergency removal of a Main Street building which began to collapse. The village then borrowed $150,000 to pay for emergency repairs to the main water line serving the village beneath Bennett State Road.
Neither of the loans have been re-paid, due to what Johnson describes as financial missteps on the part of prior village officials and bad legal advice given by its former counsel.
"In every prior administration that's been on since 2009, I think people were thinking they were trying to do the right thing or find other ways to pay, but in the end nothing ever came of it and nothing ever got paid," Johnson said.
Now the lender, which Johnson identified as Evans Bank, wants the loans re-paid ...thus the proposal to raise village taxes by 445% to obtain the needed funds.
The village property tax rate, currently $5.13 per thousand dollars of assessed home value, would rise to $27.97 in the next budget.
Put another way, a homeowner whose house is assessed at $50,000 would see their village tax bill rise from $257 to $1,398.
"Well, on a fixed income it's kinda tough, you know?" said Joe Hodkin, a retiree who lives steps away from the municipal building where a public hearing on the budget proposal is due to be held on Wednesday night.
"Supposedly it's only going to be for one year, but I've never seen anyone take taxes off once they got them on," Hodkin said.
"I'm sure there are going to be some very unhappy people," said Johnson, who says the village may consider selling surplus land to help mitigate the called for rise in tax collections.
$400,000 may not sound like much to a government, even a small one. But Johnson notes the entire annual budget for the village is normally around $100,000.
Worse, he says failure to repay the outstanding loans may jeopardize the ability to obtain funding to finish a $6 million project to replace the village water system, which is currently underway.
"We have to do what we have to do with this. We don't have a lot of choices," Johnson said.