Saturday, January 31, 2009

Oh, what a tangled web we weave...

According to the Guest Editorial in today's Observer Dispatch written by Town Supervisor Earle Reed:
We were able to retain 680 jobs locally and make the business park a reality.
Funny, on November 4, 2008, an article appeared in the Observer Dispatch The Hartford says it will lay off workers...Spokesman mum on how many. The article states:
The company announced it would lay off 500 people companywide, but Snowden [the company spokesperson] would not say how many workers at the New Hartford site would lose their jobs. ...The New Hartford office has 680 employees.
So if the company started with 680 employees and there was an undetermined number of employees laid off last November...how is it that The Hartford could have still retained 680 employees?

Supervisor Reed goes on to write:
Other local officials agreed that the development of the business park has the potential to become a major economic vehicle for the town at a time when we really need it. ...the total property taxes being generated from the business park (over and above The Hartford’s payments in lieu of taxes agreement, or PILOT) have already increased from approximately $6,100 in 2007-08 to approximately $36,000 in 2008-09.
That is because so far the town has only sold a Bond Anticipation Note in the amount of $1.4 million not the the $2.3 million that Fiscal Advisors based their calculations on and that the Town Board authorized in October 2008. So naturally, the interest on $1.4 million is less than on $2.3 million. However, according to the schedule prepared by Fiscal Advisors & Marketing, a $2.3 million bond will leave the town with insufficient funds to pay back the debt during the first five (5) years of the bond.

That is where the developer's Letter of Credit comes in. The signed Letter of Credit states it is not to exceed $500,000 and is good until 2018; with decreases each year in the amount available to cover any shortfalls. After 2018, the Letter of Credit is non-existent, but the debt won't be paid off until 2023. That leaves 5 years where we can all hope that there is sufficient tax revenue to pay off the remainder of the debt because according to the Town Board resolution, they have pledged the "faith and credit of the Town of New Hartford" for this $2.9 million debt. Who do you think is "on the hook" if anything goes awry in their predictions of "future growth" or if their "calculations" are wrong?

Incidentally, according to the Payment in Lieu of Taxes agreement (PILOT), The Hartford is only committed to their lease for 10 years; after that, they can walk away. And the signed PILOT agreement allows The Hartford to grieve their assessment each May...what do you think the chance of that happening is?

Which leads us to another point. Supervisor Reed writes in his Guest Editorial:
With the above agreement in place [meaning the PILOT agreement] and a secured letter of credit provided by the park developer [Larry Adler], the $2.3 million the town authorized last year is covered in full over the 15-year period.
Sure, it is covered in full, by your tax dollars that will not be used to offset any school, town or county budget increases as a result of the new development...instead any tax revenue generated by the business park will be used to repay debt for a private developer. The plan is to deposit the tax revenue monies in an interest-bearing account that will be managed by Oneida County Industrial Development. They in turn will release the money to the Town each year to re-pay the debt.

Supervisor Reed also wrote:
...The town issued a bond anticipation note last year that it now needs to convert to 15-year financing as planned.
Actually, the Town Board authorized a $2.3 million Bond Anticipation Note in October 2008, but they only sold a Bond Anticipation Note for $1.4 million in November 2008, which by the way they have already spent, so why are they asking voters to approve a $2.9 million bond?

According to Supervisor Reed, "Voting “yes” for the bond means":
* No tax increase.
Does anyone in New Hartford believe that their school, town and county taxes will not go up anyway; particularly with Earle Reed at the helm?
* Bond payments will be covered by the PILOT Agreement.
What crystal ball are they using that they can predict the future, especially when we are currently in a recession.
* Increased tax revenue as the remaining parcels are developed.
When will that be? First we were told that ground would be broken for a hotel and doctors' office building by September 2008, then we were told Spring 2009. Is Supervisor Reed talking about AFTER the intersection is constructed on 840? Just who will be paying for that?
* More jobs.
First, we need to hear about more businesses wanting to build in the business park.

And to think that when Larry Adler first presented his plan to the town [pre-Earle Reed], he filed a State Environmental Quality Review form stating that he didn't need any Local, State, or Federal Funding...guess all he needed was TAXPAYER FUNDING!

Perhaps it is time to tell Emperor Reed that he has no clothes and we can see "everything".

By the way, please don't miss our Guest Editorial in today's Observer Dispatch "Town Bonding Procedure Undermined Voters".

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