Cost-conscious town finance official 'thinks out of the box'
Published 8:25 pm, Wednesday, August 4, 2010
Ray Jankowski, the New Milford finance director, wants taxpayers to know town management is ever on the lookout to save money by "thinking outside the box."
Officials' most recent effort, he said last week, was to use temporary borrowing to pay for the sewer plant expansion rather than a federal loan program with a higher interest rate.
This strategy required considerable effort and could save the town as much as $147,000 in interest payments, said Mr. Jankowski, who appeared July 26 before the Town Council to offer an update on the town's financial status.
He explained how the town has managed to borrow some $9 million to cover the first phase of the sewer treatment plant expansion at 0.36 percent interest, substantially less than the federal Clean Water Act program's 2 percent interest.
The money borrowed short term could also be reinvested until it must be used to pay expenses, he explained, and the town earns interest on that money..
The town is eligible for $24 million in federal Clean Water money and a $6 million federal grant for the sewer plant project.
Town Council vice chairman Roger Szendy, who presided at the meeting, commended Mr. Jankowski and the town's executive leadership for continually looking for places where money could be saved.
"They are always looking for every nickel under every rock,'' Mr. Szendy said.
At this time, Mr. Jankowski said, it pays for the town to wait on using the federal loan program because short-term interest rates are so low. When temporary borrowing has more than the 2 percent interest rate guaranteed by the government, then the town will use that money, he noted.
The town was able to obtain a $3 million bond issue, or long-term financing, to cover the ambulance barn construction and the town's portion -- $865,000 -- of the Route 67/Grove Street traffic realignment.
Those were obtained at a favorable 2.95 percent interest rate when 3 percent or higher is the norm, he said.
"I want taxpayers to know we're doing what some don't think we are doing,'' Mr. Jankowski.