POWNAL — The Select Board has approved a plan to borrow on a short-term basis to allow the town office project to launch as soon as the weather allows — provided town voters approve a project bond during the March 30 election.
Board liaison Rebecca Dragon and town Executive Assistant Tim Darter gave a presentation Thursday on the transitional project funding option, which Dragon said is commonly used by municipalities since the Vermont Bond Bank only accepts applications for bonds twice a year.
Short-term borrowing of a few months — with the amount to be paid back as soon as the bond amount is released — would allow the project to begin early in the construction season, they said.
In this case, the $600,000 bond, if approved on March 30, would be released in August, Dragon said.
FUNDING PLAN
Pownal voters are being asked to approve $865,000 for new town offices near the current office on Center Street. Funding would come from a $600,000 bond, $90,000 from undesignated surplus funds the town has, and $175,000 in a town office fund set up a number of years ago for the purpose.
The board on Thursday first approved using $106,000 from the existing office fund for a down payment to secure the bid price from Preferred Building Systems for modular sections of the new offices. That would secure the price, Dragon said, and avoid a 6 percent increase if there is a delay.
That vote and one in favor of short-term borrowing, which was approved for several aspects of the project, were made contingent upon voters passing the bond question March 30.
The board approved borrowing up to $450,000 if needed to cover early project needs. Among initial needs are excavation work, estimated at $52,000; the foundation, estimated at $100,000; moving a 19th century schoolhouse to be brought to the site and attached to modular sections, estimated at $22,500; and work by Messina Builders on the project, estimated at $64,000.
Dragon said interest rates are now at 1 to 2 percent, and the loan time period would extend until the bond money is released, expected to be in August, and the loan is repaid. The bond application process begins in May, she said, and the town has been assured by its bond attorney that Pownal will qualify for the bond.
Details about the borrowing option were worked out with the town’s bonding attorney and banking officials, she said.
Board member Robert Jarvis and others said they believe $450,000 is the right number for the loan application, because it’s possible the project would be close to completion by August, and that amount would ensure having funds in hand to keep the project moving forward.
Dragon said the board votes will allow People’s United Bank to begin preparing the necessary paperwork for the borrowing, which takes a couple of weeks.
The project involves moving the nearby historic schoolhouse on North Pownal Road to the former Bartels Lodge site near the current offices and adding two modular additions for a new town office and meeting facility.
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Pownal OKs short-term loan to speed new office project - Bennington Banner
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