Review of City Finances and Capital Needs Points to a Bond
By Robin Jovanovich
Finance Committee chair Greg Usry provided background on the committee’s recommendations to date to the City Council, as well as the rationale behind them, at the June 20 Council meeting.
The ten-member committee has met actively since February 1, he noted. They have completed their review of the operations and expenses of Rye Golf Club, the Boat Basin, DPW, RyeTV, and the Department of Public Safety. Currently, they are examining permits, fees, and fines, and how long since any was last increased. (In the case of parking permits at the train station, the last increase was over six years ago.) Next on their agenda are the Rye Free Reading Room, the Rye Nature Center, and the Rye Arts Center.
“Our overview is organized along three lines,” Usry explained. “Recognizing non-discretionary capital needs; identifying revenue enhancements or more equitable sharing; and improving the budget process.”
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The Committee, which has worked closely with City staff, was unanimous in its recommendations.
At the top of the Capital Projects list are:
• $1.6 million for new sanitation vehicles
• $2.4 to $3 million in Court facility improvements
• $1 million for a new HVAC system at City Hall
• $650,000 for the Salt Shed (“designed 25 years ago and eroding”)
• $250,000 for Fuel Station replacement.
The official infrastructure needs amount to $9.9 to $10.5 million.
“Standard and Poor’s, two months ago, stated that deferred municipal maintenance will impact rates,” said Usry. And rates are rising. “Rating agencies are going to look at city infrastructure.”
Because the City of Rye has maintained its triple-A bond rating, it will be able to borrow “cheaply”. And borrow, the City Council will likely do. The Council has the authority to bond for up to $11.5 million without a referendum. (A change to the City Charter under the previous Council gave them that authority.)
If the City bonded for $11.5 million, the annual debt service would be $800,000. “It’s reasonable that we can find $400,000 to $500,000 to go towards the bond expense,” said Usry. In order to generate more revenue, the Finance Committee recommends increasing train station parking permit fees, raising the target of Rye Recreation’s contribution to the City by 5%, charge Enterprise Funds for the use of the City’s credit when they borrow money for projects. Rather than go forward with improvements at RyeTV, the Committee and the Council agree that because RyeTV receives most of its revenues from cable franchise fees, those revenues are really taxes and should be transferred into the Capital Reserve Fund.
The Finance Committee also concluded that a Citizen’s Budget Report should accompany the City Manager’s proposed budget that is presented each fall.
The 2018 Finance Committee report is available at ryeny.gov.
Stay tuned.