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Danbury ad hoc committee recommends adopting state development act to enable conduit bonds
Summary
An ad hoc panel voted to recommend that Danbury adopt the Connecticut Town and City Development Act, allowing the city to serve as a conduit issuer for private projects; bond counsel said the city would not be liable for repayment, and the administration could negotiate administrative safeguards before any project moved forward.
Holly Robinson, chair of the Danbury ad hoc committee on the Connecticut Town and City Development Act, said the meeting’s purpose was to get answers to outstanding legal and financial questions and decide whether to recommend the draft resolution to the full City Council.
“The purpose of tonight’s meeting is really twofold. It’s to receive responses to outstanding questions … and, second, based on the information, it’s for us to deliberate … on the proposed resolution,” Robinson said.
Bond counsel Glenn Santoro briefed the committee on the statute’s mechanics and the city’s role. “The city is not liable for the bonds,” Santoro said, describing the transactions as conduit financings in which the applicant pledges project revenues and security to bondholders. He added that the statute allows the council to adopt an act-resolution and, separately, to consider any bond resolution later; the act resolution itself could be referred to voters but the bond resolution cannot.
Carly Santos of the mayor’s office framed the proposal as a selective economic-development tool. “This is an $80 to $90,000,000 facility that could potentially come into our community,” Santos said, arguing the city should use the act sparingly to help large, difficult-to-finance projects attract investment.
Committee members pressed for safeguards. Members asked whether adopting the act would supersede Danbury’s charter limits for bond approvals and whether applicants would need a down payment or other upfront collateral. Santoro said the act’s provisions operate notwithstanding the $3,000,000 council threshold in the charter and that while the statute does not require a down payment it does require applicants to pledge revenues and other security that would satisfy bond buyers.
The committee also discussed administrative burdens and disclosure. Santoro said applicants would prepare the official statement and that applicants would typically pay city bond counsel fees and an annual administrative fee to cover the city’s oversight costs. The ad hoc members discussed asking the administration to seek specific reporting or audit rights in the underlying transaction documents, rather than inserting detailed requirements into the bond resolution itself.
After discussion, Councilman Halley moved to accept the draft resolution and recommend adoption of the Connecticut Town and City Development Act and to send the resolution to the City Council for approval. One member announced a dissent based on concerns about superseding the charter, and the chair called and declared the voice vote carried.
The committee’s action recommends adoption of the enabling act; it does not authorize any particular bond or approve Danbury Proton or any other applicant. The full City Council will consider any act adoption and any future bond resolution if and when a specific applicant presents the required documents.
