Highway.. moved from town council thread

[Electric Eye]

That really isn't all that wise... Paying payments past the life time of the product then borrowing again to redo the job again. How do 7 people sit in a room and come up with this?

Are you sure you have your facts correct?

This would be like buying tires for your car that you know will last 4 years yet you borrow the money over 8 years. 4 years goes by and your borrowing once again to replace those tires while still paying for the original tires. You end up carrying a never ending balance that cost us interest.

That can't be correct.

Got to my facebook group, in the files section is the 200+ page 2018 budget pdf, look at the bond amortization (pdf pages 18-19). for the bond terms you will probably have to foil or go through the board minutes.

[Electric Eye]

Update March 28th 2017 , bonded $3million for 15yrs for "reconstruction and resurfacing of various highways" http://cheektowagatownny.iqm2.com/Ci...73&Inline=True

[WNYresident]

what page?

[Electric Eye]

what page?

Page 13-16, see page 16 Under THIRD for 15 years

Several bonds approved at that meeting.

See page 21 for info on $775000 they bonded for 40yrs for "drainage improvements on town Highway"

Why the hell 40yrs for such a small amount of the towns $108mil budget? The reserve fund could cover this 25 times over and pay ZERO interest.

[WNYresident]

What is the interest rate on that $775000?

[Electric Eye]

What is the interest rate on that $775000?

I don't know as it is not posted but would assume around 2% at that time.

[WNYresident]

I think you are misreading what is going on.

See page 21 for info on $775000 they bonded for 40yrs for "drainage improvements on town Highway"

There is no way the town is borrowing 775000 for 40 years for a maintenance item.


https://www.bankrate.com/calculators...alculator.aspx

Do you know that on a 775,000 loan at 2% for 40 years would cost the town $351,511.38 in interest.

Even at 1% it would cost us $165,624 to borrow that money.

[Electric Eye]

I think you are misreading what is going on.



There is no way the town is borrowing 775000 for 40 years for a maintenance item.


https://www.bankrate.com/calculators...alculator.aspx

Do you know that on a 775,000 loan at 2% for 40 years would cost the town $351,511.38 in interest.

Even at 1% it would cost us $165,624 to borrow that money.

from page 21:
PLEASE TAKE NOTICE that on March 28, 2017, the Town Board of the Town of
Cheektowaga, in the County of Erie, New York, adopted a bond resolution entitled:

“Bond Resolution of the Town of Cheektowaga, New York,
adopted March 28, 2017, authorizing the construction of
drainage improvements on Town highways, stating the
estimated maximum cost thereof is $775,000, appropriating
said amount for such purpose, and authorizing the issuance of
bonds in the principal amount of $775,000 to finance said
appropriation,”

an abstract of which bond resolution concisely stating the purpose and effect thereof, being as
follows:

"FIRST: AUTHORIZING said Town to construct drainage improvements on Town
highways; STATING the estimated maximum cost thereof, including preliminary costs, and
costs incidental thereto and the financing thereof, is $775,000; APPROPRIATING said amount
for such purpose; and STATING the plan of financing includes the issuance of bonds in the
principal amount of $775,000 to finance said appropriation, and the levy of a tax upon all the
taxable real property within the Town to pay the principal of said bonds and interest thereon;

SECOND: AUTHORIZING the issuance of bonds in the principal amount of
$775,000 of the Town pursuant to the Local Finance Law of the State of New York to finance
said appropriation;

THIRD: DETERMINING and STATING the period of probable usefulness
applicable to the purpose for which said bonds are authorized to be issued is forty (40) years;
the proceeds of said bonds and any bond anticipation notes issued in anticipation thereof may
be applied to reimburse the Town for expenditures made after the effective date of this bond
resolution for the purpose for which said bonds are authorized; and the proposed maturity of
said $775,000 bonds will exceed five (5) years;

[WNYresident]

I don't see the interest rate

[Electric Eye]

page 26, $200,000 for sidewalk repairs, bonded for 10yrs. Yet another project that should be paid for with the reserve fund.

The bonds pay tax free interest to anyone who invest in them, I bet many town employees have these in their portfolios and that is driving the purchase of them, They are making money on our tax money and we the taxpayers are paying more because of it.

I think bonding should only be for big dollar long term, long life project such as the sewer projects that are underway. If your going to bond, Don't do it for the lowest payment, but do it for the shortest term, that is how to keep the cost the lowest on projects of say $5mil or more and pay off debt faster.

[gorja]

Here are some of the interest rates


http://www.tocny.org/Portals/0/Depar...etterhead).pdf page 50

[Electric Eye]

Here are some of the interest rates


http://www.tocny.org/Portals/0/Depar...etterhead).pdf page 50

Just to highlight a few more:

Ice rink $2.4mil at 2.25-5% for 30yrs Total interest paid at 2.25%= $918,126.05

2016 Sidewalks $642K at 2.25-5% for 30yrs Total interest paid at 2.25% = $238,712.77

Garbage totes $550,000 at 2.25-5% for 30yrs Total interest paid at 2.25% = $210,403.89 or $524,040.46 at 5%


SMH at the money wasted on interest!!!!

We truly have a problem here, it is either stupidity or cashing in on the bonds for personal gain.

[cheektowaga]

I would have to think the bond rate is more than 2%..gotta have a return for the bond insurers and investors...hence higher taxes in the end.

[Electric Eye]

I would have to think the bond rate is more than 2%..gotta have a return for the bond insurers and investors...hence higher taxes in the end.

The Finance director told the CBAC that bond interest was around 2%, the above chart supports that.

The Bond rate is based off the feds rate, the rate has been around 2% for several years but has seen some increases in 2018.

The town should really stop pushing debt off for decades, sometimes 2 generations. The tax payers are paying more in the long hall and why should our kids and grand kids pay for OUR debt?