Members of the Southampton Town Board were cautiously optimistic at a work session Friday about a plan to borrow $125 million over four years to purchase additional open space within the town.
The plan was presented by members of the Community Preservation Fund Advisory Committee, who presented the board with a “wish list” of properties, about 2,000 acres. They noted that with current low interest rates and prices, it is an ideal time. Some of the properties on the list include portions of Dune Road in Quogue and East Quogue, Town Point in North Sea and agricultural parcels.
The proposal entails borrowing $35 million the first year, followed by $30 million over the next three years, to be paid back using revenue from the Community Preservation Fund. Under this plan, along with potential matching funds from the county and state, the town would be able to purchase up to 80 percent of the properties on the wish list, or up to 70 percent without the matching funds.
“Every one of those properties [on the wishlist] is entirely justified for acquisition,” said Kevin McDonald, the director of public lands for who was at the meeting.
According to CPF Advisory Committee Chairman Robert Anrig, the town would not be locked into this plan, and could cease borrowing at any point. Under the plan, the town would also have enough additional money should any other important properties come to market.
During the presentation, board members expressed reservations that the borrowing might have a negative impact on the town's bond rating, or place an undue strain on the budget, given the 2-percent tax cap recently enacted by the state. Town Supervisor Anna Throne-Holst, I-Sag Harbor, asked whether the debt service could be covered by going into the general fund if the revenue from the CPF is too low. Although Comptroller Tamara Wright said they could, Anrig told the board that will most likely be unnecessary, if the projections the committee worked out.
“We've done our best to assure you this is a self-funding program,” he said. “It should not be reliant on any revenues from the town, the CPF clearly stands alone and has a surplus at that. And there's no indication from a rating industry that this would have any impact on our bond rating.”
Board members, particularly Bridget Fleming, D-Noyac, agreed that the time seemed to right.
“If you consider the fact that interest rates are low, that prices are low, that the inventory is diminished now to the point where it's finite … and more property owners are willing to sell, I think it's important for us to take advantage of all those coalesced factors and see what you come up with. It's a very good opportunity to leverage some very low cost money into some very high valued land,” Fleming said.
Throne-Holst asked the advisory committee to come up with a plan for implementing the project, including which properties are highest on the priority list, and Councilman Jim Malone, C-Hampton Bays, asked to see a plan that would involve borrowing only $65 million.