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Board Debates 'Political Hot Potato,' $125M CPF Borrowing Plan

Proponents cite current low interest rates, land prices; opponents say price is too high and obligation too much.

Following up on a conversation that he had with the Southampton Town Board at the beginning of August, Bob Anrig, the chairman of the town's Community Preservation Fund Advisory Committee, said on Friday that he feared a $125 million proposal to borrow money to make CPF purchases had become a "political hot potato" amid election season, and urged the board once again to consider borrowing while real estate values and interest rates are low.

"Going forward with a $125 million bond is good, smart government," Anrig said. "And it's something the town should do now. Land is available, prices are the best they've been in a long time, and financing is at all-time lows."

Anrig said the board has been stalling since the proposition was first mentioned to the board and, at the urging of Councilwoman Bridget Fleming, D-Noyac, went on to explain in more depth why the decision should be made.

But Republican and Conservative members on the town board contested the soundness of such a measure, calling the sum too much to borrow in an uncertain economic time.

"My concern — as is the concern of some of the folks up here — isn't that we're not interested in continuing to preserve open space," said Councilman Jim Malone, C-Hampton Bays. "Some have the perspective that we should be more cautious about how we proceed."

At the August meeting during which the , Malone had asked to see a plan that detailed borrowing $65 million. The largest reservation with the bigger borrowing plan is that should the town not bring in enough CPF funds to cover its debt payment in a particular year, the balance would fall to taxpayers.

"I don't have a crystal ball for this election; I don't have a crystal ball about this economy. What I do know is that I don't want to get caught short," Malone said.

Fleming and Anrig said that the burden falling to taxpayers was far from likely as Anrig's estimates were extremely conservative, and at any time, the town could forgo making purchases and issuing some of the bonds. In addition, the town has two years of CPF reserves built up, which they said could cushion any drop-out in the real estate market.

Town Supervisor Anna Throne-Holst, I-Sag Harbor, said that one of the reasons the town is able to maintain its credit rating is precisely its ability to take in funds each year through the CPF, invest in its open space, and add to the value of buying near preserved land.

Patrick O'Connell November 16, 2011 at 08:53 PM
Borowing on projected future CPF revenue? Doesn't sound to me like responsible fiscal policy. If CFU revenue fails to materialize, taxpayers will be left holding the bag. I have a better idea: Why don't we try cutting costs and saving a few bucks for a rainy day instead of borrowing to spend? Or at worst come up with plans that spend no more than town is guaranteed (not projected) to receive to pick up a few bargains! Just a thought. :)

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