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Carroll County Times

New Windsor develops plan to pay off Dielman Inn, passes town budget

NEW WINDSOR - The New Windsor Town Council will be taking $157,050 out of its reserves to pay off the remaining 90 percent of the purchase price of the historic Dielman Inn property after the council voted 3-2 Wednesday night to pay off the mortgage being held by the previous owners rather than acquire a new loan for the property purchase.

Town Manager Frank Schaeffer prepared a chart with several options for the Town Council, including an option to get a two-year interest-only loan from the bank, getting an interest-only loan tied to an existing town account so as to get a lower interest rate, or paying the remainder off from town reserves.

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The two loan options would equal about a $9,000 and $3,300 annual payment for interest, Schaeffer said, but would allow the town to keep more of money available in its reserves for emergency projects.

The town has $271,000 in its operating reserves for the general fund, $234,000 in invested reserves, and $691,000 set aside in reserves for the sewage lagoon remediation project, he said.

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Town Clerk and Treasurer Donna Alban said that the town's operating reserves are so high because the town moved $157,000 from its invested reserves to the operating reserves when it purchased the Dielman Inn last year. The intention was to have that money available should the town not be able to find an investor or buyer in the time limit it gave itself when the council voted to move forward with the purchase.

The town listed the property with an agent several months ago, and while there have been some interested parties, nothing has resulted in a sale.

Councilman Steve Farkas said he didn't think it was a good use of the town's money to pay for an interest-only loan when there is no guarantee that the town will have sold the property in two years, leaving the town in the same situation two years from now.

Councilman Ed Palsgrove agreed and made a motion to use reserves to pay for the property.

"I can't see taking out a loan when we have the money to pay for it," Palsgrove said. "I wouldn't do that with my money."

Councilman Sam Pierce said he was concerned about eliminating a substantial part of the town's available funds for emergencies.

Palsgrove, Farkas and Councilwoman Kim Schultz voted to use the reserves to pay off the property, and Pierce and Councilman Kevin Null voted against the motion.

In other New Windsor news, the Town Council voted to approve the proposed budget for Fiscal Year 2013 Wednesday night after hearing no comments at the budget's public hearing. The general fund budget is balanced at $630,450, a 4.5 percent increase over the current year's budget, and is based on the current town tax rate of 20 cents per $100 of assessed value of property.

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The enterprise fund is budgeted at $771,600, a 9.6 percent increase over the current budget, but Schaeffer said that budget could change once the town hears back from the Maryland Department of the Environment on how the town's loan from MDE will be restructured.

The town announced April 16 that it had received a $2 million grant that was built into the state capital budget that passed by the Maryland General Assembly. Schaeffer said it is still uncertain how MDE will restructure the town's payment plan for the $3.9 million loan the town has through MDE for its new wastewater treatment plant, but early estimates show that the town's annual loan payment to MDE should be reduced from $206,000 to $95,000. The loan and grant are scheduled to be discussed by the Maryland Board of Public Works June 20, he said.

Also at Wednesday night's meeting, the Town Council passed an ordinance authorizing the town to receive a loan from MDE for its water tank painting project, a step that is required by MDE as part of the loan process. The loan amount is set at $400,000, Schaeffer said, and has already been accounted for in the town's water and sewer rates.


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