NJ Town Council Establishes Way to Cover Preliminary Project Costs Prior to Bond Issuance

North Judson Town Council members considered a couple of ordinances Monday night related to the future water and wastewater projects.

Since the Town won’t be issued bond funds until the start of next year, officials have to establish a way to pay for preliminary project costs in the meantime.

Clerk-Treasurer Andrew Rowe and Town Attorney Justin Schramm recently consulted with the town’s bond counsel and financial advisors. They were told that about $100,000 will be needed for preliminary costs related to the water project and $250,000 is estimated to go toward initial costs related to the sewer project.

Schramm explained that one ordinance before the council would allow an interdepartmental loan transfer. Essentially, this permits the council to transfer up to $100,000 from the Cumulative Railroad Revenue Fund and use it for the water project. He said the ordinance specifies that they have five years to put the money back but they won’t need all that time since they’ll receive the bond money in less than a year.

Clerk-Treasurer Rowe added that to pay for a portion of the sewer project, there’s a chance they will utilize some money from the General Fund. However, if it starts to deplete the fund too much, he said they may acquire some bond anticipation notes. Those would allow them to borrow the money, with the promise that the funding source would be reimbursed once the bond sale goes through.

Additionally, members considered an ordinance creating separate funds for both projects; a Water Construction Fund and a Sewer Construction Fund. Money will be transferred into and expended out of these accounts as CommonWealth Engineers and other entities involved in the process start to bill the Town for various aspects of the projects that are conducted prior to the bond issuance.

Rules were suspended so each ordinance could be considered on all three readings. They both passed unanimously during Monday’s meeting.