Northport has received a one-year extension on a $2 million debt it owes the state Environmental Facilities Corporation for a loan used to upgrade the sewage-treatment plant, Village Treasurer Leonard Marchese said Tuesday.
The extension saves the village from having to decide between drawing down nearly half its reserve funds or taking on more debt in the form of bonds to meet a Sept. 22 payment deadline.
The extension is to be finalized in September, but Marchese said the corporation has agreed to a deal that will maintain the village’s 0.31 percent interest rate.
Trustees said at a village meeting late Tuesday they have reached a consensus to accept the extension.
“The EFC has given us this lifeline and enabled us to move forward with good management,” Deputy Mayor Henry Tobin said.
The corporation also will conduct a review at the end of the year and consider giving Northport an additional extension, if necessary, Tobin said.
A corporation spokesman confirmed the extension Tuesday, noting Northport has various pending grants that will be used to pay off the debt.
The village has yet to receive more than $1.6 million in grants that officials were counting on to pay off the debt, including a $1.5 million Regional Economic Development grant from the state that was approved in October 2013.
A spokesman for the Dormitory Authority of the State of New York said state officials will likely finalize the approval process for the grant in a few weeks.
In addition to the economic grant, Northport is waiting for two state Aid and Incentives for Municipalities grants — one for $50,000 and one for $100,000. Village officials have not received a timeline for when those funds will come through.
Tobin has said the grant money will go toward paying down the debt as soon as it is available.
Once the village receives the $1.6 million — and $377,000 in other grant funds expected to hit village coffers later this month — the village will owe the corporation only about $10,400. Tobin said that could easily be paid from village reserves.