The Town of Hempstead Town Board recently voted to authorize Comptroller Kevin Conroy to refinance a portion of the town’s debt.
The town will enjoy lower borrowing rates by refunding up to $32 million in bonds that are becoming due in the near future. It estimates that it will save its taxpayers $1.4 million by such an action.
“This is necessary now,” Councilman Bruce Blakeman explained at the Feb. 20 meeting, “because as we’ve seen in the past couple of weeks, most of the economic forecasters now indicate that the interest rates may become volatile and move in an upward level. So now we’re trying to get ahead of the curve and make sure we’re able to refinance if we find out that the interest rates start to creep up.”
Added Supervisor Laura Gillen, “Basically, I put forth the resolution to make sure that our comptroller has the ability—if market conditions indicate it would be prudent to refinance—to do so…if it would result in a savings for our taxpayers.”
Councilwoman Erin King Sweeney observed, “This refinancing plan is a fiscally prudent move to achieving a maximum bang for our buck on serial bonds, used for a wide variety of purposes, including capital projects and improvements throughout our township.”
King Sweeney noted that the original plan, introduced Feb. 6, called for $110 million in refinancing. But with the bonds redeemable in 2019, King Sweeney stated, “there would have been no way to accurately predict what market rates would be that far out, which creates uncertainty as to the impact of such broad refinancing on Hempstead taxpayers.”
Conroy, after meeting with the town board, recommended the figure of $31.4 million in bonds that are refundable in May 2018, “which will allow us to refinance using the most accurate, current market data to save money on interest rates and protect taxpayers,” according to King Sweeney.
Gillen and Blakeman, at the Feb. 6 meeting, tabled the resolution calling for $110 million in refinancing.
At the March 20 meeting, Senior Councilwoman Dorothy Goosby took the supervisor to task for talking to the town’s bond advisors without informing councilmembers.
“You’re absolutely right. I did talk to them,” responded Gillen. “And I’m glad that I talked to them about [refinancing] and it was very good for the taxpayers.”
“I know differently,” Goosby stated.
“You know differently? Well, I can get you the financial information that will show the money that’s going to be saved by refinancing the debt, and the money that was lost because we did not refinance in December (under her predecessor, Anthony Santino). I’ll give that information to your office.”
At the same meeting, Gillen also voted no on two resolutions for hiring additional financial advisory services and bond counsel services for the town. She objected that the professional services contracts were done without a bidding process.
In a statement read out at the meeting, Gillen said, “I ran for this office on a platform of introducing transparency and good government to the Town of Hempstead. Voters elected me because they are tired of business as usual and of a patronage system of government that has been, at best, careless with taxpayer dollars. Unfortunately, my colleagues are resistant to turning the page and their effort to award a contract to a new bond advisor and counsel of their choosing—selected without going through an open and transparent RFP process—is a prime example. My office repeatedly asked the council to issue a [Request for Proposal] RFP for these services—if they felt strongly that an additional bond advisor and counsel was needed. They declined to do so.”
She added, “A fair and open competitive process also helps discourage favoritism, and encourages additional vendors to compete for our business.”
Gillen concluded, “On April 10, I am going to introduce a resolution to bring us in line with other municipal governments and require RFPs to be issued for professional services in excess of $20,000. The taxpayers deserve the transparency, accountability and good government they voted for.”