On Jan 27, the Town Council voted to approve Synthetic Tax Increment Financing which will use the Town Hall building as collateral for the Ephesus – Fordham infrastructure improvement installment loan. The Town procedurally can now pay consultants to do the planning and projected stormwater and road improvements by borrowing against the Town Hall asset. The Ephesus – Fordham infrastructure improvement plan is currently estimated to cost $10 million.
It’s a concern to us that the Town is borrowing against an asset (Town Hall) other than for the one being financed. The Town expresses confidence in this troubled economic period that new office and retail revenues from Ephesus – Fordham would pay for it all. Yet Budget Director’s Ken Penoyer’s memo looks only at the projected revenues of the project, and ignores the cost of providing Town services to the properties proposed to be redeveloped; these services include police, fire, road maintenance, transit, and on and on. Since the new taxes from the redeveloped properties must be dedicated to paying back the installment type loan that pays for the infrastructure improvements, the shortfall caused by paying for Town services for the large new buildings would need to come from the Town’s taxpayers.
In addition, we note the costs of the needed infrastructure has escalated from $6 million initially to $10 million now and could end up to be twice that. The recently commissioned Town stormwater study estimates a 6 million dollar cost, versus the $1.8 price tag allocated for these improvements as part of the $10 million infrastructure plan. What will the road improvements really cost when construction bids are received? When was the last time the cost of a preliminary road construction plan came in above the actual road construction project cost? The Town-commissioned stormwater study estimates a $6 million cost, versus a $1.8 million price tag for improvements that we think will be difficult to achieve in a flood plain.