At Thursday night’s Mayor & Council meeting, there was discussion regarding the actions taken by the New Jersey Local Finance Board regarding Roselle Park’s schedule application on the bond that was approved on October 6th’s regular meeting of Mayor & Council.
In a correspondence with Lisa Ryan from the State Local Finance Board, she stated that state law requires towns to have debt service schedules that are flat or declining over time, “Roselle Park was seeking approval for a bond with a non-conforming maturity schedule, meaning they were looking for special permission to issue debt service with an escalating debt service schedule. At Wednesday’s Local Finance Board meeting, they were given the option of asking for a vote on the merits on their application or the option to come back at the next meeting in November with a debt service schedule that is more reasonable. They opted to rework the figures in their bond application.”
Ken Blum, in a phone conversation, stated that the municipality will not be returning in November since the Finance Board would be requesting a non-conforming schedule which would be higher than the conforming schedule, which does not need special permission from the Board. He explained, “We don’t want to have a schedule that pays off even amounts. We were looking to adjust principle amounts to overlap with our existing debt so the tax impact wouldn’t be the greatest the first year.”
“When you have just a conforming schedule, your biggest impact is going to be your first year,” he further went on to explain, “For years and years and years, they’ve allowed towns to do this. Now the governor told the new director that this is to stop. If we were in two months before, more than likely we would have passed.”
Mr. Blum stated that the projects covered by this bond schedule had already been approved by ordinances and have already been purchased, done, or are in the process of being awarded. He expanded upon the issue and how it will affect the Borough in 2011, “What happens now, now that the impact is all at once, other programs may go because now we’ve got to compensate for this but the rates are at historic lows. That’s why we’re going (ahead with the conforming schedule).”
The initial cost increase in debt services will be roughly about $550,00 in 2011. Mr. Blum stated, “We looking for that to be about half.”
In speaking with all three (3) mayoral candidates, Joe Accardi said, regarding the bonds stated, “It’s expenses that we’ve incurred before my time and it’s money that (the town) has to pay. It makes sense to do so now since this is most most advantageous time due to the low rates. The overall savings would be much less if we waited to do this later.”
Councilman-At-Large Carl Hokanson responded, “The reason we are going to issue the bonds now is because our notes which are our temporary financing are coming due. In discussing with Bond Council, the auditors and myself, since interest rates are at a historic lows, we felt it would be in the best interest of the Borough of Roselle Park to take advantage of these rates.”
Independent mayoral candidate Kevin Murphy responded, “Thank God someone in Trenton is looking out for us. I totally agree with the State’s decision. We have to get good independent thinkers to run for office and get elected who will pass bills that will require all new spending resolutions to have projections of costs and impact statements done and attached to the bill before being voted on.”
Ken Blum, after the Mayor & Council meeting of October 21, stated that the cost for issuance of the bond would be around $39,000 and the savings to the taxpayer would be about $8,000. It was not clarified if that savings would be over and above the cost (a total savings of $47,000 that deducts the issuance fees resulting in $8,000) or if it would be a asset savings that is then offset by the fees, resulting in a $31,000 deficit.