Refinancing Bond Will Save $1.76 Million

Mar. 26, 2015

Joanne Pilgrim

The remainder of a $31 million bond issued by East Hampton Town in 2006 will be refinanced, enabling the town to save $1.76 million in interest while paying off the debt over the next 12 years.

The money was borrowed for land acquisitions ($25 million), for construction of the town justice court ($2 million), and for the rehabilitation and reconstruction of the Montauk Playhouse Community Center ($4 million).

Almost 10 years later, the town has paid off almost $10 million of that debt, with $22.12 million remaining.

While the town has been paying interest at a rate between 4.25 and 4.37 percent on the original bond issue, Len Bernard, the town budget officer, said Tuesday, investment advisers expect that, with an AA2 Moody’s credit rating, East Hampton should be able to get a rate at about 2.15 percent by refinancing. That will yield a $145,000 savings this year. The move will not extend the overall payback period of the original borrowing, which runs through 2026.

In addition to approving the refinancing of the 2006 bond, the town board voted last week to issue a number of new bonds to cover various purchases and capital projects. Issuance of the bonds is subject to permissive referendum.

The planned expenditures are as follows: $30,000 for radios for the Harbors and Docks and Ordinance Enforcement Departments; $55,000 for police headquarters building improvements; $180,000 for vehicles and equipment; $250,000 for computer equipment; $140,000 for renovations to the Highway Department building; $120,000 for roof repairs, and $465,000 for improvements to various parks.

In Montauk, spending plans include $150,000 for repairs to the Fort Pond House in Montauk; $40,000 for improvements to the Montauk Playhouse parking lot, and $100,00 for improvements to the downtown public bathroom.

Bonds will also be issued for $85,000 to replace reduced pressure zone valves; $10,000 to replace beacon lights; $500,000 for a basin cleaning truck; $350,000 for road reconstruction; $75,000 for sidewalk reconstruction; $40,000 for a fence and gate at the Sanitation Department, and $20,000 for improvements to the Justice Court building.