Written by Michael Scro Wednesday, 07 August 2013 00:00
With the referendum on the Town of Oyster Bay’s proposed sale of its DPW complex to Simon Property Group, the Albanese Organization and Castagna Properties set for August 20, a recent development concerning the Town’s bond rating has generated more concerns.
Late last month, Standard & Poor’s Rating Services placed The Town of Oyster Bay on ‘credit watch,’ where S&P analyst Lindsay Wilhelm said it “reflects our view that if a voter referendum for a property sale fails to pass, or the sale does not otherwise proceed as planed, the town could have difficulty meeting its financial obligations if it further fails to
receive state approval to issue deficit bonds on a timely basis.”
Wilhem also said: “If the referendum is successful and Oyster Bay is able to close on the sale quickly, we believe that the proceeds should help stabilize the town’s deficit reserve position.”
The Town of Oyster Bay reacted in a statement, saying “any statement about the potential of a compromised cash flow is premature,” and the most recent report from Standard & Poors “reiterates what we’ve known to be true with respect to our financial recovery process - while maintaining our “A” general obligation credit rating.”
The Town said they have “developed a plan to see us through these difficult times, and to help keep the burden off the backs of our already hard-pressed tax-paying residents.
The plan included cutting expenses, enacting a retirement incentive to reduce (our) The Town’s payroll and obtaining helpful union concessions, all of which have been completed.”
In the Town’s 2013 budget, they identified the sale of surplus land, being the DPW Complex in Syosset, which they said in their statement: “Is reaching the end of its useful life.”
“If this land sale is approved by the residents through a ‘yes’ vote, the property will provide a significant cash infusion to the Town, which will help stabilize the Town’s cash reserve position,” the Town said in their statement. “There are ongoing negotiations on a variety of fronts to bring in a significant cash infusion to the Town, that may more than make up for any shortfalls.”
The Town of Oyster Bay Democratic Committee released a reaction statement via e-mail, opening with: ‘The fiscal insanity in the Town of Oyster Bay continues.’
“The gross mismanagement and incompetence of Team Venditto has led to two bond downgrades in the last 18 months and S&P is now threatening a third if the upcoming referendum on the sale of public property fails,” the committee said. “Democratic candidate for supervisor John Capobianco has been sounding the alarm for months, pointing out that Town of Oyster Bay is nearly $1 billion in debt, taxes have been raised 49 percent in the last few years and the cost of borrowing has become prohibitive as a result of the recent bond downgrades.”
Spokesperson for Long Island Jobs Now, Kyle Sklerov, an organization entity incorporated by Taubman Centers Inc., said the downgrade is “proof of what we already know: the
Town of Oyster Bay has been consistently mismanaged and poorly run,” in a statement.
“That’s why quality of life in Oyster Bay keeps declining, its why taxes keep going up, and it’s no wonder the Town is now facing over $800 million in debt. What’s clear from all of this is that the Town’s judgment and ethics simply cannot be trusted – by anyone,” Sklerov said. “That’s why we believe the taxpayers will vote ‘no’ on the referendum and send a strong message to these people.”
Taubman Centers Inc. is seeking to build a mall on the former Cerro Wire property, which is adjacent to the DPW site. According to Taubman, they would pay more for the land, and collected signatures in the form of a petition to force a referendum vote.