With nine projects currently on Port Jefferson Village’s plate, the board decided July 20 to put over $2 million worth of beach, road and facility improvements into a 5-year bond anticipation note, known as a BAN, anticipating more surplus and grant funds in the following years.
The nine projects are worth $2,364,216, though all are in various phases of development and the end costs on several could change. With grants and the use of otherwise existing funds, the village anticipates it will need to pay off $1,241,416 over time.
Denise Mordente, the village treasurer, said a BAN is a 5 year loan that has lower interest rates than a normal bond, with this one being at 1 percent. In that time between when a BAN becomes a bond, the village is anticipating to have paid off significant portions of what they owe through the grant funds or other surpluses.
• $118,562 for the Highland Boulevard retaining wall project
• $519,745 (with a $450,000 grant) for an expansion of Public Works Facility and creation of a emergency command center
• $399,250 for the East Beach retaining wall
• $711,150 (with existing $350,000 bond and $350,000 grant) for Station Street project
• $141,056 (with a $49,000 grant) for Rocketship Park bathroom renovations
• $125,603 (with a $73,800 grant) for Village Hall bathroom renovations
• $180,000 for the Longfellow Road drainage project
• $814,069 (with an existing $300,000 bond, $200,000 grant and $314,069 in parking funds) for Barnum Parking Lot project
• $230,000 for the digitization of planning department records
For this year’s budget, Port Jefferson’s $9,992,565 in appropriations was a 3.19 percent decrease from last year’s total amount. Not only that, but Port Jeff’s settlement with LIPA over the assessed tax value of the Port Jefferson Power Station meant the village will need to raise $6,451,427 from taxes, a near $50,000 increase from last year.
Mayor Margot Garant said in previous years the village has had its surplus carried over from year to year, which has been used to fund these projects, especially when grants often take a significant amount of time before the village can be reimbursed on said projects. This year, with the loss of revenues from the first and second quarters due to the pandemic, the village anticipates much less of that surplus into next year.
“We have a lot of projects in the works, but what we don’t have is a lot of surplus money,” she said during the livestreamed July 20 meeting. “We are three years into the LIPA glidepath and last quarter losing $350,000 due to COVID, we still closed last year’s budget with a surplus, but it’s just not the money we used to have.”
The village is currently working to pay off two other existing bonds, while one other BAN on the village books will be made into a bond this August. That original $1,480,000 BAN was created in 2016 to finance the purchase of a vehicle for the department of public works, renovate Rocketship Park and purchase the dilapidated structure on Barnum Avenue that will soon become a new parking lot. As the BAN becomes a bond, that $1.4 million has been lowered down to $720,000, and will be a 2 percent interest rate. The first payment of $85,000 will be due in 2021.
The two older debt services the village is paying off include a 2011 and 2013 bond with a total outstanding debt of $4,040,000, which are expected to be paid off in 2029. Both of those bonds were refinanced in 2019, which saved the village about $37,000 a year, according to Mordente.
The village currently has an AA bond rating.
The board also tackled the difficult question of potential future staff layoffs due to the loss of funds this year. Trustee Bruce D’Abramo suggested the village makes active strides in its budget and potentially even borrow money to reduce layoffs.
“I would like to see us make up for the projected revenue from the courts, from parking and from the Village Center — I’d like to see us borrow that money and make our 2020-21 budget whole for the rest of the year and not lay any of our good employees off,” D’Abramo said.
Both Mordente, in speaking with the village’s financial advisers, and Village Attorney Brian Egan argued that current municipal finance laws wouldn’t allow for Port Jeff to borrow in that way.
“Everyone’s in the same boat, they’re up against that same issue,” Egan said, who added the village will monitor bills in Albany that would allow municipalities to gain access to additional funds.
D’Abramo confirmed the village should be thinking about such in the future.
“I would like the board to think about this, so we can keep all of our employees,” he said.