On May 4, the Village of Munsey Park conducted a referendum on whether it should issue bonds to a maximum amount of $6 million dollars to finance the cost of the extensive road repair and rehabilitation program that has been in the planning and development stage for the past six months. Although the village board of trustees had the legal authority to issue bonds without a referendum, a decision was made early in the process that bonds would not be issued without a majority vote in a referendum. A total of two hundred (200) votes were cast in the May 4 referendum with the result being: No: 116. Yes: 83 and one blank vote. The referendum was defeated.

During the six months preceding the referendum, the road project was the subject of discussion at the monthly village board of trustees meetings, and in several press releases issued by the village and in articles in the Voice of Munsey Park, and in the Manhasset Press. Information was posted on the village website http://www.munseypark.org. There were also two special presentations on March 30 and April 20 at the Munsey Park School auditorium where the scope of the project and the proposed financing were outlined by our village engineer and financial adviser and residents were given an opportunity to have their questions answered. Finally, at the end of April, the board issued a letter to each household before the referendum that again outlined the proposed project and its impact on village taxes, and encouraging voter participation in the referendum.

In the days immediately leading up to the referendum, it became abundantly clear to the board that there remained a fairly high degree of misunderstanding among the community with regard to the referendum. The board would like to take this opportunity to share with all residents some answers to the frequently asked questions with the aim of clarifying this very important issue. The board submitted the following:

Question: Why must the village assume the responsibility for the repair of the roads?

Answer: The village owns all 10.2 miles of its roads. The roads are not state, county, or town roads. We are solely responsible for the full cost of providing all necessary repairs and upkeep and do not receive financial support from other governments or agencies. The village roads are in excess of 50 years old and in the case of roads classified as "D" and "F" (23 percent of all village roads), require immediate attention under Phase I of the proposed project. It is an unfortunate fact of life that many of the village roads are of a similar age and as a consequence, the roads are deteriorating simultaneously. The board has no choice other than to do necessary and required repairs.

Question: What about Phase II of the program that is focused on roads that have been rated "C"?

Answer: Roads in this category represent approximately 40 percent of all village roads. The present condition of these roads does not require immediate attention; however, unlike a fine red wine, "C" roads will not improve with age. It is assumed that these roads will deteriorate to "D" and F" levels within the coming 5 to 10 years, thereby requiring repair and reconstruction.

Question: Was the purpose of the referendum to secure approval of the residents to proceed with the road reconstruction program?

Answer: No, the purpose of the referendum was to determine the method by which the cost of necessary and required road repairs and reconstruction would be financed. The village has basically two options available: pay for all repairs immediately and in full at the time that the cost is incurred (i.e. "cash basis"); or, finance the cost of the repair and reconstruction through bonds issued by the village, spreading out the payment over 15 years, the estimated useful life of the road. In both cases, village taxes would have to be increased to cover the cost.

Question: What would be the impact on a resident's village taxes if the bond issue was approved and the village borrowed $3 million to finance the cost of repairing all roads classified "D" and "F"? How does the cost of a bond issue compare to the tax impact if the project were paid for on a cash basis?

Answer: For purposes of illustration, let us focus on Phase I of the proposed project that was to repair all roads classified "D" and "F" over the coming two years at a cost approximating $3 million. The tax effect is as follows:

Home valued at	$3M 15 Year Bond	$3M Cash Basis
$800,000	$260 p.a. for 15 years	$1,434 for each of 2 yrs.
$1,000,000	$325 p.a. for 15 years	$1,792 for each of 2 yrs.
$1,300,000	$425 p.a. for 15 years	$2,345 for each of 2 yrs.

Question: When would the required tax increase become effective?

Answer: Assuming that Phase I of the road reconstruction program commenced in July 2005 and was completed in July 2007, the resulting tax increases would be as follows:

15 Year Bond: The first payment to bond holders is required to be made at the end of the second year from the date of issuance of the bonds. Accordingly, village taxes would be increased commencing with the 2007/08 tax year.

Cash Basis: Commencing at the latest with the 2006/07 tax year.

Question: Why does the board of trustees favor the issuance of bonds over the cash basis?

Answer: The board is unanimously of the opinion that it is far more equitable to spread out the cost of this repair over the useful life of the road. In this manner, the financial burden is shared by all village residents, current and future, who will derive the benefit of the road repair project. Additionally, prevailing interest rates continue to approximate historical lows of the past 40 years, making the cost of financing very attractive at this time.

Question: If the road on which I live does not require repair or reconstruction, why should I have to share in the cost?

Answer: The cost associated with the maintenance and upkeep of the village infrastructure, of which roads are a major component, is the responsibility of all village residents. Let us remember that the village infrastructure also consists of sidewalks, parks, trees, lights etc., that may not be either used or appreciated by all residents. Nonetheless, the cost of maintaining these and all village amenities is derived from taxes assessed on all residents.

Summary: Like all residents of Manhasset, the board of trustees is well aware of the ever-increasing tax burden on all of us. Mindful of this legitimate concern, during the past five years, your Board has dramatically contained spending in the face of rising costs. Unfortunately, the combination of an aging road infrastructure, coupled with several consecutive harsh winters, has taken its toll on our streets.

The overall projected cost ($6.5 million) of the entire road project approximates five times our 2005/06 financial budget. Clearly, if this expenditure were to be financed on a cash basis, it would result in draconian tax increases over several selected years. Accordingly, the board remains of the opinion that paying for this necessary project through the issuance of bonds is in the best interest of all residents.

The village must maintain our roads and will be considering its options at the board's regularly scheduled monthly meetings (second Wednesday of each month at Village Hall commencing at 8 p.m.), and, when appropriate, special meetings with the dates to be announced. We will continue to make use of mailings to ensure that all our residents are thoroughly informed regarding this very important issue.

The board of trustees is keenly interested in receiving your comments and input. Please take a moment to advise us either by email haverso@munseypark.org or via mail, indicating your views and recommendations as to how you would like us to proceed with regard to this very important matter.

We encourage all residents to attend all public meetings and to constructively participate in the process.