Vote fails on borrowing for building purchase

By NEAL RENTZ

A plan for the Lewisboro Town Board to have the option to borrow at least some of the cost of purchasing a commercial building for some town government offices has failed. The purchase will instead come from the fund balance.

On May 27, the board voted 3-1, with one abstention, to purchase the Old Post Road Professional Building and Annex, located at 892 Route 35, Cross River, for $2,222,500. 

The town is currently renting space from the Katonah-Lewisboro School District at the former Lewisboro Elementary School. (See related story on Page 3.) 

Supervisor Tony Gonçalves, Councilman Dan Welsh and Councilwoman Mary Shah voted to approve the purchase. Councilman Richard Sklarin voted “no” and Councilwoman Andrea Rendo recused herself from the vote.

In a recent interview, Rendo said she recused herself from the discussions and votes on the building because she formerly was a commercial tenant of the landlord at 892 Route 35, who also owns the building recently purchased by the town. She subsequently moved to another building, which is not owned by the landlord of the building bought by the town.

At their June 23 meeting, the town board had a majority, 3-1, with Rendo abstaining, to support the borrowing resolution, but a supermajority of four votes was required for passage. 

Prior to the vote at this week’s meeting, Supervisor Tony Gonçalves said the resolution would allow the board, if needed, to borrow to pay up to the full price of the building.

Prior to the vote, Sklarin voiced his opposition to the resolution.

“I was hoping we would use this opportunity to do things in a more comprehensive fashion for the taxpayers of Lewisboro instead of piecemeal,” he said. “We need a police station, and we need a courthouse, and we need both of those things now.” 

The police station and courthouse will not be housed in the building purchased by the town.

Towns are required to operate a police station and courthouse, Sklarin said. The commercial building was sold at “a significantly elevated purchase price,” he said. The building was sold at 100 percent of its asking price with the town not using a real estate broker, he said, adding the building was not listed on the open market for sale.

The town has about two-and-one-half times the purchase price of the building in its fund balance, Sklarin said. 

Welsh said the town board should choose the least expensive option between using fund balance or borrowing.

But Sklarin said the town board should take a comprehensive look at the town’s needs, which includes sites for a courthouse and police station.  

Shah said purchasing the Route 35 building and seeking sites for a new police station and courthouse are not “mutually exclusive.”  The town must move out of the former elementary school, she said. 

The Katonah-Lewisboro School District has said it would not continue its contract with the town.

In response to what occurred with last week’s resolution, Gonçalves said this week he has been talking with his board colleagues, the comptroller and the town’s financial advisor.

“One of my jobs is to make sure we make fiscally responsible decisions which have the least impact to the taxpayer,” he said.

During the budget process the board reviews the capital needs that are outside the operating budget, Gonçalves said. It has historically funded capital projects with a bond anticipation note, which is a short-term bond that could be paid in full or rolled into long-term borrowing, he said. 

  “The town was fortunate to see an increase in the general unreserved fund balance as a result of conservative budget practices and positive revenue results under the direction of prior long-term Comptroller Leo Masterson,” Gonçalves said.

“The town has moved forward with a $2.22 million purchase of an office building, which will enable us to provide rent-free space for our employees currently occupying the former elementary school. We pursued a bond resolution to provide us the flexibility to pursue a BAN [bond anticipation note] short-term loan, up to the amount of the purchase price. Essentially, we would close on the property, use fund balance money for the closing and then have the flexibility to pay ourselves back with the BAN,” Gonçalves said.

“It is fiscally irresponsible for a board member to vote against this borrowing resolution; by voting ‘no’ on the bond resolution, we lose the opportunity to pay back the usage of the fund balance,” Gonçalves said.

He said the town’s unreserved fund balance is at a healthy level.