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Town set to dump $6.5M off its books; Bond money stems from wind turbine
Credit: By Tim Riel | The Jamestown Press | 2017-10-26 | www.jamestownpress.com ~~
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Translate: FROM English | TO English
Despite a rabid plea by town officials to reject the referendum, voters in November 2010 approved a multi-million-dollar bond to construct a wind turbine.
With nearly 3,000 registered taxpayers casting ballots, the measure passed with 50.2 percent of the vote.
While no windmill ever was constructed, the $6.5 million in potential borrowing has been hanging over the town’s head. As that vote reaches its seven-year anniversary, however, the town is ready to relinquish the burden.
“Most people have forgotten about it,” said Town Administrator Andy Nota, who was deputy to South Kingstown’s chief executive at the time. “But because the voters authorized it, we’ve had to carry that debt on our books. We are always questioned about it.”
Those questions will stop following the Nov. 6 public hearing to extinguish the bond. Although this action won’t affect the municipal bond rating, which Moody’s has rated Aa1, Nota said it will benefit the taxpayers when they approve their next critical project, whether that be the library, clubhouse or schools.
“It improves our position in the eyes of the bond companies,” he said.
Tina Collins, the town’s finance director, said the town has $7.51 million in total bonded debt, which doesn’t include the $2.5 million borrowed to renovate the fire station. (That figure, she said, will be represented in the 2017 audit.) While the $6.5 million from the turbine isn’t represented in the debt, bond companies still see that number as potential liability because it’s been authorized.
“If we aren’t going to do anything with it, it’s in our best interest to just clear it off the books,” Collins said. “It shows that we are doing our due diligence.”
According to Collins, the current debt stems from building Town Hall, closing the landfill, preserving open space and rehabilitating the police station. Money borrowed for the schools also is on the books, although that bond is set to expire in the next five years, possibly as early as 2021, she said.
According to the 2016 audit, the town legally can borrow up to $65.9 million, which is 3 percent of the $2.2 billion total taxable assessed value in town. The $7.51 million in total bonded debt represents just 11.5 percent of the total that can be borrowed.
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