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Saving Lake Reality


The New Jersey Department of Environmental Protection (DEP) has awarded a $750,000 low interest loan to the Lake Reality community so that we can upgrade our lake dam to meet current state standards.

This is the same loan program Fayson Lakes and 147 other New Jersey lakes have used to repair their dams.  This loan will be repaid by Lake Reality residents over 20 years.  The NJ DEP requires Kinnelon Borough to be a co-applicant on the loan. Should the council not co-sign this loan, the dam will be decommissioned and our

Securing our DEP loan for Dam construction:

  • The Lake Reality dam is not in danger of failing. The State is just requiring an update. However, those updates will cost hundreds of thousands of dollars. The Lake has saved a few hundred thousand dollars for the dam renovations, but it is not enough.
  • The loan application is a 2 step process. This process started several years ago, and the Town co-applied with us on the initial application for the loan (think of it as being pre-approved for a loan). Once the State determined that we are in actual need of the loan, they sent us the actual loan papers. That is where we are now.
  • To get that money, the State has set up a statutory loan program where we can get a 2% loan for the dam renovation. However, to get that loan the Town needs to sign as co-applicant on our loan application.
  • To make the loan payments, those people that live around the Lake are the ONLY ones who will pay the loan payments. The loan is for 20 years.  To get that money from the Lake Reality homeowners, the Town may issue an assessment on ONLY those who live around the Lake.  
  • An assessment is simply a tax.  For example, if the town were to install sidewalks in Smoke Rise, the people in Smoke Rise would be issued an assessment to pay for those sidewalks. Only those in Smoke Rise would pay because they are the ones that benefit from those new sidewalks.
  • To get this loan, the Town is required to sign the loan application as a co-applicant. This indicates to the State that they (the Town) is comfortable with the Lake residents‘ ability to make all the loan payments. In addition, it confirms that the Town is prepared to issue an assessment to pay for the loan if needed.
  • As a co-applicant of this loan, the town is NOT a guarantor of the loan. If for some reason the payments dried up, the town is NOT liable for any of the payments. This is stated in the legal statute that established this loan program.

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