A legal snag in the $200,000 loan Alna voters approved for a firehouse addition last March, necessitates a return to the polls this Wednesday with a revised warrant article.
Local officials discovered recently the article does not comply with a state statute concerning municipal money raised for a third entity, which in this case, is the Alna Volunteer Fire Dept. Inc., owner of the firehouse land and facility on Rt. 218.
Town treasurer Nick Caristo said the bank would not approve the loan without a letter from the bond counsel as a result.
“I was shocked, to be honest with you,” he said. “It’s not something you want to happen on your watch. It’s a reality check.”
However, the bank has issued an advance of $33,000 for payments to Catalano’s Construction of Thomaston, since the town ran out of funds from the $160,000 anonymous donation received for the firehouse expansion and refurbishing of the facility built in 1980, along with $16,000 from reserves for that purpose.
The total $200,000 will go for the rest of the construction work Catalono has been doing this summer, which is ahead of schedule. Catalano expects to finish by mid-September now.
The bank based its action on confidence in the town vote going through this Wednesday at 7 p.m. at the Alna Meetinghouse on Rt. 128 as simply a housekeeping measure by revising the wording and adding a financial statement of indebtedness as the statute requires for municipal funds going to a non-municipal entity, according to Caristo.
Currently the town has no bonds outstanding and unpaid, as well as no bonds authorized and not issued.
The current difficulty surfaced in the wake of a controversy this spring and summer over the ownership of the property. The fire department had believed it owned the property, and the town believed it owned the property with evidence furnished on both sides.
Ironically the town voted at a special town meeting this summer to sell the property to the fire department for $1 and issued a quitclaim deed to settle the dispute. Now, however the town will have to pay $25,000 more in interest for the loan, since the fire department does not qualify as a non-profit municipal entity to obtain the loan at the reduced rate of 4.13 percent for $44,360 in interest for the 10-year loan.
Instead, the town will now have to pay $69,470 in interest if it decides to have a 10-year loan as voted in March at a 6.25 percent interest rate.
Both First Selectman Billie Willard and Caristo see the legal problem as an example of how things have changed and the legal ins and outs that complicate things today.
“Maybe 30 years ago, it may have been able to happen, but times have changed,” Willard said. “There’s problems if we don’t follow the rules.”
Willard said the financial statement should give voters a better understanding of what they are voting on, and how much taxation they can expect.
Both Willard and Caristo said the warrant article is the only question facing the voters, other than electing a moderator this Wednesday. Willard said, “The townspeople will ratify what they’ve already done.
Caristo said he hopes other communities will profit from the mistakes Alna has made. “It’s a learning curve. The hard way is always a hard thing to accept,” he said. “It’s just another reason why you need a lawyer to do anything.”
Caristo was a co-chairman of a committee that presented a proposal a few years back, for a new firehouse facility on town-owned land adjacent to the town office, which the town rejected.
The fire department then proposed the present project, which the town approved in March. Caristo praised the work the construction company has performed so far as the project nears completion.
“Catalano has done really quality work,” he said. “That’s something positive. Things do work out. We’re putting a positive foot forward.”