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City of Glen Cove adopts bond totaling $8.9 million

City aims to improve finances with five-year capital plan

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Necessary infrastructure projects are expected to be completed in Glen Cove thanks to a bond ordinance passed by the City Council last week. The $8.9 million bond is part of a five-year capital plan developed by Mayor Tim Tenke and City Controller Mike Piccirillo to provide the city with strategic direction that, according to Tenke, will benefit the city two-fold: Infrastructure work will get done, and the city will actually save money.

“When we pay it back, the interest rate will be lower than what we’re currently paying,” Tenke said. “We’re not actually impacting our budget for next year because our debt service is actually coming down.”

“This is the first time we’ve put together a comprehensive five-year capital plan,” Piccirillo said. “The city generally borrows every year, but there’s no real foresight into what the coming years would require. But having a five-year plan gives us that vision. It also gives transparency to the public on what we anticipate doing over the next five years.”

Tenke and Piccirillo said they  had met with each city department head to create the plan, which includes improvements to infrastructure, roads, water wells and public safety. Under the plan, approximately $1.4 million will go toward rehabilitating city streets, and about $1 million will be spent on a new Seagrave Pumper truck for the Fire Department, replacing a 30-year-old engine. A total of $758,400 will be allocated to park and beach improvements, including the replacement of the flooring at Stanco Playground, Pryibil Beach pier repairs and other improvements.

About $2.85 million will go to the water department, for work including the Seaman Road well rehabilitation ($1.35 million) and the Nancy Court well rehabilitation ($1.2 million). The plan also includes the purchase of new grounds equipment for the golf course, new emergency equipment for the EMS department and replacement vehicles for the Police Department.

“These are completely capital-driven projects,” Piccirillo explained. “These are all things that necessitate infrastructure improvements, not related to termination payments or tax certiorari payments.”

He also noted that some of the projects are grant-funded. “We borrow the money now,” he said, “and then receive reimbursement from the county, state or whoever provides the grant to offset the debt service payments.”

Last year the city upgraded all of the streetlights to LED lights through the Energy Services Master Cost Recovery Agreement with the New York Power Authority, a $1.1 million project that Tenke said would now actually save the city money. “That project will self-fund itself because of the savings that we will realize in electricity and maintenance over a 13-year period,” he said. “Through Mike’s calculations, if we pay this off now and finance it under a lower interest rate, we’ll save approximately $160,000, and it’s not costing us any additional money.”

The interest rate for the LED project is currently 4.28 percent, Tenke said, which is double the municipal-bond interest rate the city anticipates for current borrowing. With the $1.6 million in grants associated with the capital borrowing, and the maintenance and electric savings of $1.4 million over the term of the lighting-conversion project, he said, a total of $3 million will offset the $8.9 million borrowed.

In the past, Tenke said, the city has been hit hard by multiple retirements, and has also sold off assets in order to cover unexpected expenses. Having a broader plan, he said, will help it budget for those types of expenses. “We’re really working to improve the financial stability and outlook for the city,” he said.

“This is only part and parcel of the long-term planning that the city is currently doing,” Piccirillo added. “We started putting together a 2021 adopted budget that we feel is structurally sound and realistic, to be where the city needs to be at this point in time. And then once you have the realistic budget to build from, you build a five-year capital plan, and then you build a five-year operating plan, which will be the next part of the whole long-term fiscal improvement for the city. That’s the only way we can really work to see what the city needs as far as managing the city finances.”

On Monday, six days after the City Council unanimously passed the resolution, Piccirillo said that the city was preparing the documents. “Right now we’re at the point where we’re putting together all of the documentation to give to the bond adviser, who will put together an official statement to give to the marketplace for them to decide on who will actually buy the bonds,” he said. He also noted that the timing seems right from a financial standpoint.

“February of this year had historically low municipal rates, and by the time we borrow, we anticipate it to be relatively the same,” Piccirillo said. “That was one of the reasons that it was important to do as much as possible this year, not just because the city needed it, but our debt service payments going forward will be less than they are in the current budget.”

Before voting on the bond resolution, Councilwoman Marsha Silverman thanked Tenke and Piccirillo “for finally getting the city on a longer-term plan and tying it into a longer-term operating budget, which will really set the city on a path for more fiscal discipline.”

Piccirillo told the Herald that city departments’ priorities were discussed when the plan was put in place. “This provides a better strategic vision for the city, so we know what to expect down the line rather than every year starting from scratch, trying to figure out what the needs are at the time,” he said. “This way there’s a placeholder in every year, which will change as new developments come into play. It’s important to start looking at the city in a longer-term sphere.”