The city plans to borrowl more than $16 million in early February to recover the costs of a number of projects that are already underway or completed.
Selling the bonds and notes will bring in revenue to replenish the $17 million rainy day fund, which is full of IOUs because officials have dipped into it for several years to cover spending that includes even the purchase of the now demolished downtown mall.
City Comptroller Glenn Klocko said experts are telling him the city might be able to pay as little as 4 percent on the long-term bonds that it’s selling.
That’s half a percent cheaper than he figured just a couple of weeks ago and could mean a savings to taxpayers of $100,000 over the life of the bonds, Klocko said.
“The rates are extremely low,” Klocko said, adding that catching the market at the right moment is “all about timing.”
The City Council and Board of Finance voted to approve the borrowing recently, with city Councilor Mike Rimcoski raising the only real opposition. He said he could not vote to borrow money for buying the mall because he so strongly objected to it.
City Councilor Frank Nicastro, who also opposed the $5.3 million move in 2005, said he abstained because he was not on the council when the mall was purchased.
The city is making a pitch to bond rating agents on Jan. 27 to leave intact the city’s solid financial rating. The bond sale itself is slated for Feb. 5.
Klocko said that next time the city sells bonds, he’s going to try for an upgrade, which would allow Bristol to borrow even more cheaply.
He has a secret weapon, too: ESPN.
It seems that giving the financial analysts a personalized tour of ESPN, including the chance to sit behind the SportsCenter desk for a picture, is such “a hot commodity” that it might help Bristol make its case.
Some projects included in the bond sale:
$4.5 for Rockwell Park renovations
$385,000 to replace Bristol Eastern’s track
$600,000 to reconstruct Allentown Road
$700,000 to repair the North Creek conduit
$800,000 to replace the Main Street culvert
$3.5 million to demolish the mall
$6.3 million to buy the mall
Contact Steve Collins at scollins@bristolpress.com
13 comments:
So we'll pay 4% to replace money that is costing us half that.
Go figure.
Who is monitoring Kloko?
How come every time the rainyday fund is talked about in the past it has always been said that we have 17 million in the account? Steve is it you that is missing the boat on this or Klocko playing his game?
The city's financial report is online so feel free to delve in. Nobody's hiding anything.
The "rainy day fund" is a shorthand way of describing the undesignated reserve fund. That is the money the city has parked in a bank -- except when it spends it in full awareness that when a bond sale is done, it will reimburse the rainy day fund. There isn't anything devious, underhanded or even complicated going on here.
I didn't miss the boat and Klocko's not playing any games. These are all straightforward decisions by the Board of Finance.
Steve, couldn't find it.
Can you help?
Is the city audit on line?
Thanks
$3.5 million to demolish the mall
$6.3 million to buy the mall
-Two wasteful projects which I hope haunt the political futures of those involved...eternally.
Thanks for the info Steve .I did not intend to infer that you were hiding stuff but i do not recall seeing it in the paper.It is not beyond Klocko to say one thing and really be doing something else (legal of course).
They spent "cash" money from the rainy day fund.
Now they are selling bonds or getting "borrowed" money to fill the void. Then we will pay 4% interest on the newly acquired "borrowed" money.
How is this an improvement in the city's financial status?
They are just stacking debt on debt.
They spent the money, it's gone. This maneuver is just blue smoke and mirrors - a funny finance house-of-cards.
Fundamentally, the city can't sustain itself on what it's taxpayers can't afford to pay.
Frank N. sure is slippery, isn't he?
Borrow money to put into Bristol's Savings fund??????????
What are they going to get as a return with their money? I can tell you there is nothing Safe that is earning anything close to 4%. Try maybe 2% or less. So this means Bristol will be losing money not "Saving" it!!!! It will probably cost about 5% or more off the top to issue the debt as well. How is this good for the Bristol taxpayers???
Put it in the market and try and get a better return? The State of Connecticut did that about 18 months ago (and I strongly objected to that). Now the State (Sorry Taxpayer) has those bonds to pay and has probably LOST about 1/3 of their Investment!
When will Connecticut start electing people that are not fiscally challenged??
Wait, now I understand. Replenish the rainy day fund so they can buy another mall.
They already frittered away most of it already. Borrow money, fill it up again so more can be frittered away. Don't taxpayers get it? If there happens to be money laying around, it will get spent! How about excercising fiscal restraint?
Yes, they surely spent our money.
And are now taking a cash advance on a credit card.
They call it a "bond sale".
Ordinary citizens can't do a "bond sales" to meet their expenses.
We get stuck with the loan sharks at the credit card companies.
Wish we all could do personal "bond sales" and issue IOU's to the government at tax paying time!
Kloko: ever hear of transparency?
All along I thought the Mall purchase price was 5.3 million.
How come it is now 6.3 million?
9.8 million to create empty space (NO TAX DOLLARS)....2.2 million for the possibly polluted Crowley property (NO TAX DOLLARS)....relying on the State of Ct., while asking for furloughs from its workers,to foot the bill for two new schools that we probably don't need....ARE YOU KIDDING ME!!!The rainy day fund itself is proof of the ridiculous over-taxation of the citizens of this city!! Stop the insanity.....
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