Huntington Supervisor Frank P. Petrone and Town Council Members Mark Cuthbertson and Susan A. Berland charged today that the Town Board minority has jeopardized the Town’s financial health by failing to vote on a resolution that would save residents $700,000 by refinancing the Town’s debt.
“By their actions, Councilmen Mark Mayoka and Eugene Cook have politicized a good government effort whose only goal was to save taxpayers money. Instead, they have sent a message that could have serious repercussions for Town finances projecting years into the future,” Supervisor Petrone said.
Councilman Cuthbertson added, “Their blatantly political grandstanding conveniently ignores the fact that the information they said they needed before they voted was actually contained in a resolution they voted for at the first Town Board meeting this year. In addition, waiting until the Town Board meeting to raise questions shows that they really didn’t want the answers. This is a sad day for Huntington residents.”
“Huntington’s informed voters will see through this costly political ploy and understand that if we don’t work together in Town Hall, all Town residents will come out losers at the end,” Councilwoman Berland said. “Not only does their failure to vote on the refinancing potentially cost taxpayers money, it sends a negative message to the financial community that could affect the AAA bond rating the Town has worked so hard to achieve and maintain and could deter investors from buying Town bonds. And in fact, rebonding at lower interest rates saves taxpayers hundreds of thousands of dollars, It’s a no-brainer.”
At issue is a resolution to refinance $24 million in bonds issued from 2002 to 2005 to achieve a lower interest rate. The refinancing was recommended by New York Municipal Advisors Corporation, the Town’s fiscal advisor for bonding issues. NYMAC projected the refinancing would save taxpayers $100,000 a year for the remainder of the life of the bonds, or more than $700,000 overall.
In 2009, NYMAC recommended a similar refinancing of $13 million of other Town debt that also saved taxpayers about $700,000.
Mayoka and Cook abstained on the resolution, which by law required four votes – a “supermajority” – to be approved. As a result, the resolution failed.
In explaining their failure to vote, Cook and Mayoka cited lack of knowledge of some facets of the refinancing – facts they should have known. For example, despite their contention that they had never heard of NYMAC, both Mayoka and Cook voted to retain the firm in a resolution approved at the Jan. 10 Town Board meeting.
Additionally, as was pointed out to Councilman Cook at a previous Town Board meeting, the State Comptroller’s office must approve any bonding resolution. That approval includes the fees paid for the bond counsel and financial advisor. In the 2009 refinancing, those fees totaled $55,000. One fee not required at that time was insurance because of the Town’s strong bond rating, according to the Comptroller’s Bureau of Debt Management.
“NYMAC makes these recommendations so we can undertake the refinancing at the optimal time,” Supervisor Petrone said. “By refusing to vote, and delaying the refinancing, Councilman Mayoka and Cook have taken the risk that this favorable window will close. This gambling with public money represents the height of irresponsibility.”
“Unlike Mayoka and Cook, we view our responsibility to taxpayers first and to the political process second,” Councilman Cuthbertson said.
“I view my job as 24-seven, and I know that I have to spend the weekend before each board meeting studying agendas and resolutions and preparing for the meeting. Councilmen Mayoka and Cook had plenty of time to review the rebonding resolution and to ask questions in advance. If any of us have questions, it is our responsibility to seek answers before the meeting,” Councilwoman Berland said.