To the Editor:

It has been about a year since the turf fields were completed and the June 17 article on the News-Times website described their positive impact.

I agree, but was surprised that the upgrade from crumb rubber (ground up tires) was not mentioned.

It was a contentious issue early in my term that I am glad I pushed for, since the state is considering a moratorium on crumb rubber because of potential health and environmental concerns.

We settled on encapsulated rubber and negotiated a written guarantee from the manufacturer, which was less environmentally friendly than the organic options but better than the tons of ground-up tires originally planned.

In addition, the article made a misstatement regarding the project financing, which is very important. The fact that our community and even elected leaders still do not understand how the project was paid for undermines its positive impact.

Different variations of the same theme have persisted: that the project would be funded from the Waste Management Fund, not taxpayer dollars.

At a Town Meeting on Oct. 26, 2015, about 100 residents voted to authorize the town to issue a bond up to $4 million. Ultimately, the low bid for the project was $3.5 million, and that is the amount that was bonded.

The $300,000 in requested additional funds for change orders was paid from Waste Management to avoid adding to the debt burden. Clearly though, the plan was always to bond the project, because that is what was voted on.

Next, the town and council members were told that the yearly bond payments would be paid from the Waste Management Fund, not taxpayer dollars.

When I took office, that was my assumption, too, based on what I was told. However, our bond attorney was never informed of this plan.

When we discussed it, he advised us that the town could not do that because of “arbitrage” and how municipal bonds are treated by the IRS.

Municipal bonds are not taxed by the IRS, so long as they are paid with taxpayer-raised funds. Because we are a municipality, we can finance a project at a lower interest rate.

Arbitrage prevents a municipality from borrowing money at a lower rate and investing it at a higher rate to profit from the difference. For example, we could not borrow $1 million at a 1 percent interest rate, invest it at 3 percent interest, and profit from the 2 percentage-point difference.

Similarly, using Waste Management instead of taxpayer-raised funds to pay off the bond would allow money to be borrowed at a lower rate and paid with money that could be invested at a higher rate. It also represents “replacement proceeds” set aside to pay debt service, which is prohibited.

Long story short, our bond attorney told us if we did it, we’d incur IRS penalties we do not want to incur.

I have explained this to the council, although as recently as the June 12 meeting, Councilman Pete Bass continued to claim the turf fields were paid from Waste Management funds. Despite my explanations, the idea persists.

I hope this finally sets the issue to rest and people stop making untrue claims that could expose the town to unnecessary scrutiny. I cannot explain why the prior administration proposed this prohibited payment scheme, but I hope I have explained the current situation and that, on the advice of our attorney, it was not implemented.

Regardless of funding, the turf fields are a worthwhile project and a success story for our town. Their completion and use are rightly celebrated, not as an anomaly, but as part of a larger plan to invest in our community and the things that give it value beyond a bottom line.

From this success comes the enthusiasm for the library modernization, the Pettibone Community Center, the River Trail, Lynn Deming, Hidden Treasures, road and bridge replacements, and other investments in our quality of life.

I hope that we, as a community, continue to make these investments.

David R. Gronbach

Mayor, New Milford

*Editor’s note: The article mentioned in the mayor’s letter appeared in full on the News-Times website on June 17, but was trimmed to fit space in the June 18 News-Times and did not contain the language concerning the source of the bond payments. That article also appears on page 3 of today’s Spectrum.