West Haven council schedules public hearing on $26.29 million bond ordinance

The West Haven City Council on Monday set a public hearing for 6:55 p.m. on Jan. 27 to consider an ordinance authorizing up to $26,289,900 in bonds, plus issuance costs, to finance capital projects already approved in the city's fiscal 2023'24 and 2024'25 capital budgets.

The bond ordinance covers a mix of city, sewer and Board of Education projects and would allow the finance director, mayor and treasurer (the bond committee) to sell bonds or short-term notes and to apply for grants to offset project costs. Finance Director Michael Gormeny told the council the ordinance authorizes borrowing for the capital improvement plans the council previously approved and that the borrowing schedule was already included in the city's five-year debt plan.

Gormeny said the city plans a two-phase borrowing strategy to keep annual debt service affordable. "What you have before you in this ordinance is authorization from the city council for the city to borrow for fiscal year 2023, 2024, and fiscal year 2024-2025's capital improvement plans," he said. He told the council the first tranche would likely go to market around March 2025 and the second tranche in late 2025 or March 2026, depending on market conditions.

Council and staff described the projects included in the borrowing authorization as ranging from vehicle replacements for public works and police to WPCA plant hardening, technology and school projects. Gormeny said the debt service estimates were incorporated in the five-year plan the council approved during the budget process and that the city's S&P rating review had cited the borrowing strategy as prudent.

The ordinance summary read aloud by corporation counsel says the bond committee may issue bonds under a trust indenture, borrow short-term prior to long-term issuance, address the tax-exempt status of the bonds, reimburse prior capital expenditures and satisfy post-issuance disclosure obligations. The ordinance also authorizes city officials to apply for grants for the same capital projects.

The council briefly debated the motion to place the ordinance on the agenda, rescinded a prior motion to approve it as presented, then voted to schedule the public hearing. The hearing will be the next formal public opportunity for residents to comment on the proposed borrowing and the list of projects it would fund.

If approved after public hearing and subsequent readings, the bonds would be sold in one or more tranches as advised by bond counsel and financial advisors, with the city using grants and other sources where available to reduce the net borrowing requirement.

Votes at the Jan. 13 meeting set the public hearing date but did not finalize the borrowing itself. The council and finance staff said they would return with additional detail, including debt-service impacts tied to actual market rates when the sale is contemplated.