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As of December 31, 2025, the value of the lease liability was $4,216. The Town is required to make annual principal and interest payments on the equipment. The leases have imputed interest rates of 3.5%. The value of the right-to-use lease assets as of the end of the current fiscal year was $22,380 and had accumulated amortization of $18,437 for a net asset value of $3,943. The future principal and interest payments as of December 31, 2025, were as follows: Fiscal Year Ending December 31, Principal Interest Total 2026 $ 3,260 $ 87 $ 3,348 2027 956 10 965 2028 - - - $ 4,216 $ 97 $ 4,313 11. SHORT-TERM DEBT Liabilities for bond anticipation notes (“BANs”) are generally accounted for in the Capital Projects Fund. State law requires that BANs issued for capital purposes be converted to long-term obligations within five years after the original issue date. However, BANs issued for assessable improvement projects may be renewed for periods equivalent to the life of the permanent financing, provided that annual reductions of principal are made. A summary of the Town’s short-term debt for the year ended December 31, 2025 is as follows: Interest Maturity Balance Balance Description Rate Date 1/1/2025 Issues Redemptions 12/31/2025 Capital Projects Fund: BAN - Water Tanks 3.49% 10/2/2026 $ 987,000 $ - $ 37,000 $ 950,000 BAN - Waterline Phase 1 3.49% 10/2/2026 $ 2,771,000 $ - $ - $ 2,771,000 Total 3,758,000 - 37,000 3,721,000 12. LONG-TERM LIABILITIES The Town’s outstanding long-term liabilities reported in Schedule W to the AFR include serial bonds, lease liabilities, pension liabilities, and compensated absences. Long-term liabilities as of December 31, 2025 aggregated $10,997,164. The Town’s outstanding indebtedness as of December 31, 2025 aggregated $7,603,850. Of this amount, $3,382,850 relates to serial bonds issued for the purpose of water supply and distribution and $500,000 relates to a serial bond issued on the construction of a Trooper Barracks building. All long- term debts are exempt from the constitutional debt limit other than the $500,000 serial bond which represents approximately 0.7% of the town’s debt limit. Further, the Trooper Barracks serial bond is eligible for redemption prior to maturity starting after March 1, 2022 at 100% of the par amount of the bonds to be redeemed, plus accrued interest to the date of redemption. All bonds payable of the Town are secured by its general credit and revenue raising powers, as per State statute. A default will have occurred if the payment of principal or interest are not paid when due and payable. In the event of a default a provision is made for contract creditors (including the - 106 -