The refinancing of $9.5 million in outstanding serial bonds has saved Southold Town more than $736,000, Supervisor Scott Russell announced recently.
The serial bonds were issued in 2005 and 2007 to fund projects including land preservation acquisitions, transfer station construction, the purchase of land for yard waste composting and the construction of the Fishers Island Ferry District’s New London Terminal, he said.
Those bonds were “refunded,” and closed on July 29, saving the town more than $736,000 for fiscal years beginning in 2016 and ending in 2030.
In 2016, Southold Town will save more than $21,000; that number will spike to $49,500 in 2017.
According to Russell, the final true interest cost of the refunding bonds is 2.53 percent, replacing an average rate of 3.12 percent on the refunded bonds.
“We continue to look for efficiencies in government in every way possible,” Russell said. “This initiative will save the town hundreds of thousands of dollars over the life of the bonds. Government leaders need to be diligent during these difficult fiscal times and I will continue to develop innovative ways to save town residents money.”
The supervisor added that Moody’s Investor Service has upgraded Southold’s bond rating from Aa2 to Aa1, the highest credit rating the town has ever had. Moody’s referred to Southold’s “strong management, which has a track record of conservative budgeting and financial practices,” the supervisor said.
That higher credit rating translates into savings for taxpayers, by reducing the cost of borrowing, with lower interest rates.
To read the entire Moody’s report, go to southoldtownny.gov.
“The end dates are the same but the rates are substantially less. That’s good news,” Russell said at last week’s town board work session.
At the same meeting, Town Comptroller John Cushman gave an update on the town’s financial overview moving into 2016. “The 2016 budget is going to be a challenge,” he said.
Next year, the town will not be able to raise taxes higher than .73 percent, under the state’s 2-percent tax cap, which calls for a tax cap of 2 percent or the rate of inflation, whichever is lower.
“We’re going to have to cut services, deny raises, or both,” Councilman Bob Ghosio said. “Or find a windfall. I don’t think there are any windfalls out there.”
Justice Louisa Evans asked about the town’s mortgage tax revenue.
Cushman said he believed the town would “make its nut and then some.”
“We budget for $1.1 million and w e may go as high as $1.3 million. It’s better than nothing but it’s not what it used to be,” Russell said, of the revenue stream.
