Good Morning
Good Morning
Long IslandSuffolk

'Poor cash flow' prompts more Amityville borrowing

The Amityville Village Hall on Ireland Place in

The Amityville Village Hall on Ireland Place in Amityville Village on Tuesday, Feb. 25, 2014. Credit: Steve Pfost

For the fourth year in a row, Amityville needs to borrow cash to meet operating expenses, trustees said Monday night.

Trustees authorized up to $600,000 in borrowing, but the actual amount will likely be between $400,000 and $500,000, said trustee Nick LaLota, the village's budget officer.

aIt's indicative of a poor cash flow,a LaLota said. That's the bad news. The good: aWe're doing it less.a

The village borrowed $850,000 in 2012, $750,000 in 2013 and $600,000 in 2014, using a debt security known as a tax anticipation note, LaLota said. The note is repaid by the following year's tax revenue.

Credit ratings agencies have paid particular attention to the village's use of the notes. Standard & Poor's in December cited reduced cash flow borrowing when it raised its rating of Amityville's debt from BBB- to BBB, considered adequate to meet financial commitments but still near the bottom end of investment grade.

Moody's Investors Service said last August that reduced reliance on tax anticipation notes, or eliminating their use, could improve Amityville's credit ratings.

Lalota also said the village will likely close out the 2014-15 budget year at the end of this month with a $100,000 surplus. That would be its third surplus in three years, lowering the village deficit to about $256,000, he said.

aThis is thanks to our department heads,a who have held down costs for village government, LaLota said. aWe're headed in the right direction.a

Latest Long Island News