AUGUSTA — City councilors will move forward with a proposal to hold a referendum vote in June on borrowing funds to expand and renovate Lithgow Public Library, even though at least one councilor thinks the vote should take place in the general election in November.
Nor do all councilors agree with a proposal to refinance some existing debt as part of the library financing plan, which also could go to voters in June.
With time running out to meet paperwork requirements in time to get the questions to voters in June, however, the proposal will move forward in preparation for a June referendum, without a council vote on when the referendum should go to voters until next month.
That vote probably will come at a planned April 10 special council meeting.
Proponents of a June vote said a vote then would save the city money, in part because a vote in November could push the project back so far it could cost an additional $240,000 because of a projected inflation of construction costs.
Another potential financial advantage of a June vote relates to the financing plan put together by City Manager William Bridgeo and Ralph St. Pierre, finance director and assistant city manager, to pay for the library project.
Their proposal would pay for the city’s share of the library project with a new 15-year bond package that would fund the library work, the increased anticipated operating costs of the larger library building, and the cost of moving the library into temporary quarters during construction, while also refinancing $7.6 million in existing employee pension debt.
Bridgeo said the plan would extend the time period over which the city would pay back the existing pension debt, which otherwise would be paid off in four years.
However, he said doing so, while also incorporating the library debt, could fund the library project without the need to seek a tax increase to pay for the work. That’s because the bond payments and other costs would be less annually than what the city already is spending to pay off the remaining four years of the pension debt.
The potential immediate financial advantage of a June vote, according to Bridgeo, is derived from the fact that the city has a $1.6 million payment coming up in October on the pension bond. If that debt is refinanced before October, it could save the city about $56,000 and the School Department, which shares the pension debt obligation, $128,000 this year in reduced debt payments.
Several councilors expressed support for both a June vote and the refinancing proposal.
“To have the library vote in November incurs more cost, which I’m opposed to,” said Dale McCormick, at-large city councilor. “We were elected to lead. We have two brilliant financiers (Bridgeo and St. Pierre) here who have figured out a way of financing this (renovation and expansion of) this economic and cultural gem we have without raising taxes. Let’s do it.”
Ward 4 Councilor Mark O’Brien said he favors a vote in November, at the better-attended general elections, providing for a better turnout and a less-rushed process.
And Jeffrey Bilodeau, an at-large councilor, raised concerns about the refinancing plan, noting refinancing by extending the length of time it would take the city to pay back the pension bond from four to 15 years ultimately would cost taxpayers an additional $2.4 million, because of the increased interest paid over the extended time period. He said borrowing funds for the Lithgow project while not refinancing the pension debt, and simply paying off the pension debt in four years, could cause a tax increase this year and the following three years but would cost city taxpayers less in the long term.
St. Pierre agreed extending the pension bond payback would cost taxpayers more ultimately, but he noted the value of the approximate $2.4 million cost, in today’s dollars, would be about $600,000, because of the expected lower value of a dollar in 15 years.
The Friends of Lithgow Library, the nonprofit group raising funds to renovate and greatly expand the library, has pledged to raise $3 million for the $11.7 million project, helping to offset the cost of the library. They’ve already raised more than $2.3 million in cash and pledges.
Library supporters said they favor a June vote, and they support the plan to refinance the pension debt and combine it with the library bond issue, because it could fund construction of the library without a need for a tax increase.
“We strongly support a June referendum date. Costs are only going to go up,” Rick Tardiff said. “The time is now.”
Mayor William Stokes noted the library is a city-owned building and thanked library supporters for raising private funds for the project, which would nearly triple the size of the library.
Keith Edwards — 621-5647 firstname.lastname@example.org Twitter: @kedwardskj