Forever In Your Debt...
Where to begin? Let's look at a debt schedule for Light , Water and Sewer:
Payment on this debt for FY 2016 $960,814.64
Ending balance owed on this debt at the end of this Fiscal year:
$8,157, 3231.20
The debt payment for FY 2017 for these departments is:
$1,093,270.85 for FY 2017 and increase of $132,456.21 over FY 16.
In the following fiscal years this debt will begin to decrease. In FY 2028 the light, water and sewer debt is projected to be $38,547 -
At the Special Town Meeting held on March 21, 2016 the voters added $1.23 million to that debt. That's just light, water and sewer debt. The Town of Templeton has debt as well.
Let's estimate $8.1 million dollars in current light water and sewer debt. Let's add in the Town's debt for various projects - approximately $8.1 million dollars.
Estimate FY 16 total Town of Templeton debt is about $16.2 million dollars.
In THIS fiscal year by votes at special town meetings held throughout this year, the voters have approved:
11/9/15 $47,563,184 for the Elementary school
11/9/15 $975,000 for the Police station upgrade
3/21/16 $1,230,000 for the water tank
??? $2,400,000 for the sewer pump station upgrade
In ONE fiscal year, the voters, on the recommendations of the Board of Selectmen, The Light and Water department, the police department and the sewer department have TRIPLED the indebtedness of the town. $52 Million Dollars in New Debt.
$52 Million Dollars in New Debt.
BTW - Templeton STILL does NOT have a bond rating.
Why does this matter?
The interest rates on the chart above range from a high of 5.26% to a low of 0.00%( grants).
What will the interest rates be for this new debt?
The Water tank will be funded by a USDA loan - don't need a bond rating for a USDA loan. The water rate payers will be stuck paying back that debt with their sky high water rates.
Sewer debt will be paid for by the sewer rate payers, but from where will the borrowing occur?
With this amount of new debt, the Town of Templeton will not be able to take on anymore new capital projects for quite some time.
According to the Water Improvement Plan, the water system alone needs between $30 to $35 million dollars worth of upgrades.
$52 MILLION DOLLARS in New Debt for a Town without a bond rating!
Forever in your debt!
Payment on this debt for FY 2016 $960,814.64
Ending balance owed on this debt at the end of this Fiscal year:
$8,157, 3231.20
The debt payment for FY 2017 for these departments is:
$1,093,270.85 for FY 2017 and increase of $132,456.21 over FY 16.
In the following fiscal years this debt will begin to decrease. In FY 2028 the light, water and sewer debt is projected to be $38,547 -
IF NO NEW DEBT WERE ADDED!
But hold on...At the Special Town Meeting held on March 21, 2016 the voters added $1.23 million to that debt. That's just light, water and sewer debt. The Town of Templeton has debt as well.
Let's estimate $8.1 million dollars in current light water and sewer debt. Let's add in the Town's debt for various projects - approximately $8.1 million dollars.
Estimate FY 16 total Town of Templeton debt is about $16.2 million dollars.
In THIS fiscal year by votes at special town meetings held throughout this year, the voters have approved:
11/9/15 $47,563,184 for the Elementary school
11/9/15 $975,000 for the Police station upgrade
3/21/16 $1,230,000 for the water tank
??? $2,400,000 for the sewer pump station upgrade
In ONE fiscal year, the voters, on the recommendations of the Board of Selectmen, The Light and Water department, the police department and the sewer department have TRIPLED the indebtedness of the town. $52 Million Dollars in New Debt.
$52 Million Dollars in New Debt.
BTW - Templeton STILL does NOT have a bond rating.
Why does this matter?
The interest rates on the chart above range from a high of 5.26% to a low of 0.00%( grants).
What will the interest rates be for this new debt?
The Water tank will be funded by a USDA loan - don't need a bond rating for a USDA loan. The water rate payers will be stuck paying back that debt with their sky high water rates.
Sewer debt will be paid for by the sewer rate payers, but from where will the borrowing occur?
With this amount of new debt, the Town of Templeton will not be able to take on anymore new capital projects for quite some time.
According to the Water Improvement Plan, the water system alone needs between $30 to $35 million dollars worth of upgrades.
$52 MILLION DOLLARS in New Debt for a Town without a bond rating!
Forever in your debt!
I believe it is unwise for the town to triple its debt load without a bond rating. I think it's unwise to triple the town's debt load in ONE fiscal year!
ReplyDeleteI believe this debt will have many unintended consequences for the town.
On the positive side, the audit for fiscal year 2013 has begun.
I believe the problems encountered with the merging of two incompatible accounting software systems will be difficult to unravel.
Are we getting money back ?? Are we going to owe ?? I guess it depends who you ask. It will come out in the wash.
ReplyDelete