'Historically' good time for town to build
A combination of timing, planning and circumstance has Trumbull in the best position in memory to undertake a building project, according to First Selectman Tim Herbst. (Full text of Herbst commentary here).
“If ever there was a time to do it, that time is now,” Herbst said of the idea of building a community center that would also incorporate senior services. “The market has never been this good.”
Though many in town have questioned whether the town can afford to build a new community center, Herbst said he was confident it could be done without raising taxes.
“With the state and national economy still in limbo and with the cost of living in Connecticut squeezing many middle-income families, one question I often get is, ‘Tim, how we can we make this happen without our taxes going up?’” Herbst said. “The answer is simple. Increased revenue through economic development, plus moderated levels of debt service, plus historically low interest rates equals tax stabilization.”
With the grand list showing steady growth, the town’s credit rating higher than it has been, the town’s pension fund being shored up, and interest rates remaining near historic lows, borrowing money is cheaper than ever, Herbst said.
Herbst said the 20-year bond buyer index is currently 3.2%, about half of what it was in 2010 (6%). Also, 10-year treasury notes are currently at 1.7%, compared to 4% six years ago.
In concrete terms, that means that if the town borrowed $14 million over 20 years, the interest savings could be millions of dollars compared to past years.
“And that number doesn’t even consider the debt coming off the books in coming years and the money we have saved from refinancing existing debt at the new, lower rates,” he said.
When the town borrowed $73 million to renovate Trumbull High School to “as new” condition, the interest on the bonding was about 4.5%. If the town borrowed $14 million at today’s rates versus those in effect eight years ago, the savings over the term of the bond would be $3.5 million, he said.
In addition to the time being right financially to undertake a building project, the town’s infrastructural needs also make it important to begin the planning to replace aging facilities like the Center at Priscilla Place and the swimming pool at Hillcrest, Herbst said.
For example, the current senior center at Priscilla Place dates back nearly a century, and the swimming pool at Hillcrest Middle School is inadequate for the town’s needs and constantly in need of repair, Herbst said.
“We have a once-in-a-lifetime chance to create a facility the entire community can use, and that we can build without raising taxes or reducing services elsewhere,” he said.
Note — Herbst’s 850-word commentary on the potential costs and benefit of a new community center can be read at TrumbullTimes.com.