Windfall

I’ve read about people who come into money and then the trouble starts. Town Council showed a hint of that at Monday night’s meeting when they began talking about how to spend the money from the sale of “two-thirds” bonds. These bonds don’t need voters’ approval, but council does have to approve the sale. The bonds would give the town an extra $1.7 million to put toward capital investment projects that have been neglected during the economic downturn.

Ken Pennoyer, the town’s director of business management, gave a short tutorial on re-funding (that is, refinancing) general obligation bonds and how the town is able to sell the two-thirds bonds. Council members – the six who showed up, anyway; Donna Bell, Penny Rich and Jim Ward were maybe home doing their tax returns – would have to approve both the refinancing of the general obligation bonds and the sale of the two-thirds bonds. The finance guys (Pennoyer was backed by a bond lawyer) wanted approval ASAP before the economy rebounded and the low interest rates went away. By doing both transactions together, the town would save about $40,000 in financing fees, above and beyond the money saved by switching to a lower interest rate.

All was going well until Pennoyer ran through a list of projects that the $1.7 million could cover. Some of the items were from the bottom of the priority list.

Town Council and town staff, after listening to residents’ input, spend time prioritizing the projects on the capital investments/improvements list. And Pennoyer rearranging the list seemingly at will didn’t sit right with some council members.

Matt Czajkowski asked whether approving the sale of the two-thirds bonds meant approving Pennoyer’s priority list. Completing a low-priority item just because financing was available didn’t seem fair to him. Town manager Roger Stancil said that everything on the capital improvements project list was high priority. The town has deferred maintenance on some projects for so long that they were in danger of falling apart.

That prompted Lauren Easthom to ask where repairs to the gymnastics building and the former museum building fit in. Couldn’t the windfall be used toward those projects? Stancil said the gymnastics building was in such sorry shape that it would need to be torn down, and the former museum building, at 523 E. Franklin St., might need as much as $2 million to make it safe for the public to use. (Evidently Penny Rich should thank her lucky stars that she was able to cater a party there and pocket the profit before someone was seriously hurt.)

Some council members were uncomfortable approving Pennoyer’s list of projects, but the thought of saving $40,000 in banking fees won out. (That money could come in handy once the town receives the bill for signs to warn people that they can’t talk on the phone while running a red light.) With the assurance that voting for the two-thirds bonds didn’t mean sanctioning Pennoyer’s list, council approved both transactions and has until April 30 to come up with a list of what the money will cover.
– Nancy Oates