The Clayton Town Council may, next week, make a decision that could have a profoundly negative effect upon your services to its citizens for the foreseeable future. I encourage all interested citizens in the Town of Clayton to attend the regularly scheduled Council meeting on April 27. If you want to make a difference, ask to be put on the agenda today. Your subject should be “town finances.” If you wait until Election Day on Tuesday, it may be too late to turn around a fateful decision.
The process of considering the design and construction of a new Town Hall has been thorough and open to the public. There has, however, been little consideration given to how this can be paid for. The Town has never taken on a project or obligation of this magnitude. Doing so without a thorough evaluation of our finances is irresponsible. Let your Council know this.
The conduct of Councilmen at Clayton Council meetings brings honor to the Town, Committee meetings, always advertised an open to the public, are the proper forum for discussion and debate. More information could – and should – be shared with the public at Council meetings, though. Even some Public Hearings are less informative than they should be.
I have been honored to be your Councilman for five years. I have enjoyed a professional and cordial relationship with my peers on Council, as well. So I offer this message to you after much thought and many hours of lost sleep. It is, however, Town as a whole to whom I owe my allegiance. I respect you and hope that you will offer your respectful input at the next meeting.
I have been working “behind the scenes” to deliver this message regarding the state of Clayton’s financial affairs for months. The situation is not dire, but could be. I have studied the Town finances and trends. I have also studied the proposed method of financing the new Town Hall. My conclusion, stated in several memos and reports to the Council since early February is this: the Town cannot afford this new building at this time. The chosen method of financing is, furthermore, not the best deal that we can get. We should put off this decision and study it more.
This is not the message that was delivered at the Public Hearing. I had a chance to speak, but did not because I have become accustomed to the “good manners” customary of Clayton public affairs. Before I move on, though, my conscience must be clear.
The extent of the 2008 economic downturn was not apparent until early February when the Council received the end-of-year reports. The Town spent $274,000 more than it earned in 2008. We are, roughly speaking, operating with 2004 “cash flows,” but employing a staff that is nearly twice as large. While the number of citizens served is twice as large also, the income from the sale of homes has fallen dramatically. There will be “good” months in the summer. And predicting the future is difficult. I would not be surprised that, if nothing changes, we will have a $400,000 deficit by December, though. Our Town cannot sustain this trend for very long.
Monthly expenses for the new Town Hall will be slightly less than $25,000 – which includes the lease, likely costs for fixtures and additional energy costs. Of the $3.2 million in “cash” assets owned by the Town, only $762,000 is not “restricted.” Without a new source of revenue or a dramatic turn-around in the economy, our un-restricted savings could be exhausted by 2011.
This would mean a reduction in services, layoffs, new taxes and fees – or all of these outcomes.
I believe that the method of financing should be re-considered, too. Under the committee-approved terms, the builder will lease the building to the Town for ten years and then give us the option to buy it. The lease payments on the $2 million building would amount to more than $4.5 million and then we may purchase it for another $1.7 million. If the purchase option is financed, the actual cost of the option may double again, with interest.
For less than $12,000 per month, though, we could finance the Town Hall through a bond. And we would own it in 20 years for $5.7 million.
This would require that the project be re-bid with new specifications. A referendum regarding the bond would be required, too. This referendum, unlike what you have seen from the school district, would not raise taxes. It would simply be the proper and legal way for the citizens to give Council the permission to take on the debt.
For a delay of several weeks and a few hundred dollars in advertising, we could save the Town millions of dollars over the term of the contract. I think that is a much better deal for our Town.
This contract for construction, lease and finance may be subject to a vote of Council on Monday night, April 27. Public comment is heard after business has been considered. I would suggest that anyone who cares should request to be on the agenda before a vote is taken.
I take no position with regard to the upcoming election. I, furthermore, look with favor upon the chosen builder. Lastly, I do want the Town to erect this building as we grow and serve a larger public. These are extraordinary economic times, though. And I think the best course of action would be to slow down, develop a good financial plan and to hold a referendum.
I took my duties as your Councilman and Budget Committee chairman quite seriously. My conduct, as a member of the Council “team”, was tempered by the fact that cooperation is essential to good government. The time has come for me to move on, though. It is now time for you to become more informed and involved. Please take the time to do it on April 27.
CLAYTON, Del. —
