BETHEL – Due to a short-term cash shortage, Bethel selectmen unanimously authorized an interim loan of $1.45 million Monday night for two significant capital improvement projects.

As of Oct. 17, Bethel’s cash on hand was below $250,000.

“This has been expected,” said Town Manager Scott Cole.

Faced with three proposals from Bethel banks to cover the cash needs of a new $1.3 million fire station project and a $150,000 sewer replacement project on Clark and lower Main streets, selectmen chose to borrow the money from Norway Savings Bank.

Cole said the approved general fund and sewer fund budgets for fiscal year 2004 call for 20-year loans to fund the fire station and Clark Street sewer projects.

Both projects are under way. The town has already spent $54,000 on the fire station and the sewer project “is well over $100,000 right now,” Cole said.

A permanent loan of $1.45 million from the Maine Municipal Bond Bank is expected to be closed in May.

“In the meantime, an interim borrowing will allow the town to pay for the projects now. Even with tax collections, I don’t think we’re going to have the money,” Cole told selectmen.

The bond bank loan will be used to pay off the interim borrowing.

Since 1998, Bethel has had a banking relationship with Northeast Bank. However, selectmen opted to go with Norway Savings Bank’s proposal because it offered a fixed interest rate of 1.59 percent as opposed to Northeast’s 2.2 percent.

KeyBank offered the third proposal at a fixed interest rate of 1.54 percent. But selectmen decided against it because in order to get the loan, Bethel would have had to establish a banking relationship with KeyBank.

tkarkos@sunjournal.com

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