Smithtown’s new comptroller is calling on the town board to borrow money to fund upcoming capital projects.
Donald Musgnug, who was sworn in as town comptroller in February after his predecessor, Lou Necroto, took a job with the county, provided his first capital budget recommendations report on Monday and pushed for borrowing money to pay for improvements. He listed several bullet points justifying his recommendation, as the town gears up to fund projects like an animal shelter renovation, LED streetlight retrofittings and marina bulkhead improvements.
“Interest rates are at historically low rates and the town is fiscally strong,” Musgnug said. “Now is the time to borrow, when rates are low, and thankfully we are in a position to do so.”
The comptroller said he expects replacing aging and otherwise deteriorating equipment would reduce the amount of money set aside in future budgets for repairs and maintenance. In reference to an upcoming streetlight project that would bring LED lighting to Smithtown’s streets, Musgnug said the town would offset the costs of future projects in the form of savings.
“Taking advantage of new technology, such as in the case of LED bulbs for streetlights and the municipal solid waste facility, will reduce utility costs [and] repair costs and improve safety,” Musgnug said in his report. “Because the town’s finances have been conservatively managed over the years, there is little room to cut operating budgets, making the goal of staying within the New York State tax cap increasingly difficult in light of rising compensation, health care and pension costs.”
In the upcoming year, Musgnug said most of the budgetary requests are equipment-related and should be done in the near future as assets deteriorate due to age and usage.
The streetlight project, he said, would total $5.6 million but could be offset by a possible $750,000 grant from the state.
“It should also be noted that … we expect to reduce utility costs and repairs by $350,000 as a result of the streetlight LED retrofit, which will offset the cost of borrowing, which is $270,000 per year,” Musgnug said. “So we actually more than offset the cost of installation.”
The comptroller also said the town should anticipate equipment purchases and construction in 2016, mostly because of the first phase of Smithtown Animal Shelter renovations as well as upgrades at the town marina, which collectively require about $3.1 million in financing.
The following year, he said, those projects would require about $6 million in funding overtime to complete.
After the comptroller’s report, Councilman Ed Wehrheim (R) said he was impressed by the thoroughness of Musgnug’s pitch and wants to make sure the town follows through on capital projects after setting aside funding for them.
“Overall, I think it’s excellent,” he said. “In past years, we borrowed money and put up capital projects, but they never got done. Let’s make sure someone oversees these.”
In his report, Musgnug said even if the town chose to borrow more money as recommended, it would still see its overall debt steadily drop because of its conservative fiscal management policies.
“You should be commended for putting the town into a position where it can borrow significant sums of money and still have declining debt service payments [for which] it must budget,” he said.