School: Referendum reduces town bond limit

FROM PAGE 3 not likely be sold until late 2023 or 2024, and an average Hillsdale taxpayers would not see a $95 monthly tax hike until 2024.

Ruocco told Pascack Press, “This issue of utilization of Hillsdaleʼs legal debt capacity first came to my attention when I and other council members received a Jan. 3 email from borough administrator David Troast in which he recounts the issue coming up from our bond counsel.

Ruocco said he had asked the borough Finance Committee on Jan. 10 to research the issue and report back Feb. 7, adding it was “appropriate for the public to know about this matter well before the referendum date.”

Ruocco, a retired finance officer and bank examiner with the Federal Reserve Bank of New York, said the boroughʼs and school boardʼs borrowing capacity “is a function of two separate formulas that calculate a percentage of the total averaged equalized property value of the town.”

He said, “Right now, the amount of ʻnet debtʼthat has been issued by the regional and local schools, as well as Stonybrook (pool) and the borough itself amounts to only 0.13% of equalized property valuation. That is very low (i.e. good) as it gives us a lot of headroom.”

Ruocco said if the BOE issues an $82.7 million bond, that ratio will increase to 1.33%. “It also means a reduction in the boroughʼs overall net debt issuing capacity limit from $69.3 million to $43 million … because the amount of gross debt that the local school will have on its books of $83.1 million will exceed their limit of $59.4 million.”

Ruocco said “The excess of $23.7 million is automatically and legally applied to reduce the overall town capacity limit.”

He said the $43 million borough debt limit is still enough to cover any plans the council has announced, including a long-discussed $10 million bond to pay for upgrades at Centennial Field, a community center at Stonybrook Swim Club, and possible relocation and floodproofing of DPW facilities.

“I suppose that the $43 million limit could pose a limitation on us if the regional high school district and the pool utility decide to embark on major projects requiring them to issue large amounts of debt. That is unknown,” Ruocco said.

The district says via its referendum portal, “A district can borrow beyond the margin that the stateʼs formula assigns. Hillsdale Public Schools would use some of the boroughʼs borrowing margin, but the borough itself would not take on any of this debt. Its day to day operations would remain unaffected. That arrangement has to be stated on the ballot.”

District officials said the referendum wording has not yet been approved. Lombardy told us a Jan. 30 approval is likely.

Sample voter ballots are mailed out the Wednesday before a ballot referendum or election, said the county clerkʼs office. That would give this one a March 8 target.

Lundy told Pascack Press, “Where Iʼm told the impact could be is on our bond rating, due to the change in debt to surplus ratio and our interest rate on future borrowings. While both changes are only possibilities, I feel that the BOE at the very least should have advised the governing body during their presentation in December.”

She said, “As far as I know, we were only notified through our professionals (bond counsel and auditor) who are also the BOEʼs professionals. Iʼve not had any conversation with the BOE or superintendent on the matter.”

She also said, “A FAQ about there being a borrowing margin on the ballot isnʼt being fully transparent in my opinion. I also did not see any reference to the borrowing margin until after I posted on Facebook. Itʼs possible I missed it or it may have been added after the fact.”

She said a Road To Referendum mailer she received last week did not mention the districtʼs need to exceed its borrowing capacity and borrow a portion of borough bond debt capacity.