SOUTH SALEM, N.Y. - With the Town of Lewisboro set to close on a property to house town offices, the Town Board on July 14 engaged in a lengthy discussion about expenditures, debt financing – and the looming specter of more such costs in the next few years.
During the meeting, Comptroller Annie Burnham noted that with a fund balance of $6.5 million, Lewisboro is in a “very lucky place.”
Those funds are meant for capital purchases – such as for the $2.2 million for the three-story office building in Cross River. It will house a variety of departments currently in rented space at the former Lewisboro Elementary School, except for the courts and police.
“The fund balance is a key metric of our rating with Standard & Poors,” said Burnham. “The town is rated AA+ by S+P which is the second highest possible rating [and] was an upgrade from the town’s previous rating.”
Noted Town Supervisor Tony Gonçalves: “The better the credit rating, the better the bond market access and the lower the interest rate for debt.”
This year, the Town Board has already committed to spending $1.7 million for such items as Highway Department trucks, Onatru Farm bathroom, the new town pool bathhouse, paying off a note for townwide paving projects, and other expenditures.
Those measures bring the fund balance down to $4.8 million – or about 45 percent of the town’s operating expenditures. The high S&P rating was based on a 60 percent ratio. Drawing down the fund balance by an additional $2.2 million would jeopardize the high S&P rating.
“You certainly have room to use some of your fund balance – I am not suggesting you don't,” said Janet Morley, senior vice president of Capital Fund Advisors, which counsels the town on issues relating to expenditures and borrowing. “And my understanding is the town may be considering additional debt beyond just this $2.2 million.”
Morley said the town should instead consider its long-term capital needs and how best to fund them. A lower S&P rating would result in the town paying more interest on any subsequent borrowing.
“It's of course a balancing act and you do have flexibility right now,” Morley stated. “It's a more conservative approach, certainly, to have a longer-term outlook with respect to debt planning and use and use the fund balance.”
Morely added that the town could pay itself back for the building expenditure – provided its resolution authorizing future bonding precedes the actual closing date. Such a resolution could authorize borrowing all or some of the funds and would again require a four-fifths “supermajority” of Town Board members’ approval to pass.
The Board members agreed to slate a vote on such a resolution during its subsequent meeting, on Monday, July 28.
Town Board members Andrea Rendo and Rich Sklarin urged better long-term planning.
“Doing things piecemeal and taking things one point at a time may be adverse to the town's long-term financial interest if you're not contemplating all the foreseeable long-term expenditures,” noted Sklarin.
“One piece of advice that our advisers have given us, and Annie has been talking about for months, is that we need a long-term capital plan,” Rendo said. “Perhaps right now we can't do five years, but we can certainly do the next 18 months.”
Rendo also floated the concept of replenishing the $2.2 million for the office building purchase with a bond anticipatory note (BAN), then later issuing another such note to cover future court and police facilities. These could occupy property the town already owns, she added.
Both could be rolled into a third bond, which could incorporate any “soft costs” for services such as architect fees and engineering work. Doing so would protect the fund balance and the high S&P rating.
“Because we have a high yield checking account that is earning the same amount of interest that we would pay back in a year anyway,” Burnham noted, “it [borrowing] is not any sort of burden to the taxpayers,” in terms of added interest costs.
Higher Concern
The July 14 meeting encompassed a public hearing and a vote on a very different subject: codify a town regulation for private helipads. These would require a special, two-year permit issued by the Zoning Board of Appeals and would only be allowed on parcels exceeding 50 acres.
They also would require setback distances of 500 feet from any property boundaries. Other regulations govern the number of takeoffs and landings per day, lighting, surfacing, and fire suppression.
The proposal was first put forth by Lewisboro Police Chief David Alfano, who noted that during this year alone there have been two emergencies in town requiring helicopter assistance. He also noted that lower-cost single-person VTOL (vertical takeoff-landing) craft have come onto the market and are apt to become increasingly popular.
Alfano said his chief aim was to create a set of approved landing zones for use by first responders in emergencies. Alfano also said he sought to create a set of new rules where currently there aren’t any.
“If somebody owns a VTOL craft, could they take off and land from their driveway?” asked Councilman Dan Welsh. Under the existing town code they could, Alfano said. The rule aims to get ahead of that situation.
The Town Board approved the measure unanimously. Alfano estimated that just 11 private properties in town exceed the 50-acre limit. “Some of them are horse farms, so I doubt they’re going to want helicopters buzzing around scaring the horses,” he said.
The Town Board also convened a second public hearing, on a measure to install yield signs at a rotary (roundabout) in the Goldens Bridge Wild Oaks neighborhood. There currently are none and besides posing traffic hazards, the rotary area is the site of a school bus stop.
After discussion, the board closed the public hearing and passed the new rule unanimously.
Comments
No comments on this item Please log in to comment by clicking here