Eatontown mayor urges council to draw down $47 million redevelopment proceeds to earn interest for capital projects

Mayor Anthony Talarico told the borough council on March 25 that he wants the governing body to authorize placing $47 million of redevelopment bond proceeds in an escrow or trustee account to earn interest while the borough readies capital projects.

"Let's pretend the number was not $47,000,000. Let's pretend it was $40,000,000...At 3%, that would be $1,200,000," Talarico said, using 3% as a working figure for discussion. He said his goal is to have a resolution on the April 8 agenda authorizing the drawdown so the borough can begin earning interest rather than waiting until individual projects are ready to spend the money.

The mayor and council discussed constraints on how much interest a municipality may earn and the timeline for spending or encumbering proceeds. Talarico said, from memory, he believed roughly 85% of proceeds must be spent or encumbered within three years, and emphasized the borough would work with bond counsel and the redevelopment lawyer to confirm statutory limits.

Council members and staff agreed to have the administration and the borough's financial and legal advisers return with specifics. "If our advisers say yes, I'm all for it," one council member said, urging the mayor's team to coordinate with the financial adviser and counsel before the April meeting.

If approved, the mayor said, the escrowed funds would be used only for capital: "100% to capital," he said, adding that every expenditure from the account would come before the governing body as a public transaction.

The proposal is intended to fund a list of priority projects including townwide paving, downtown improvements, Wampum spillway repairs and sewer upgrades described at the meeting. The mayor also said the borough will continue to pursue grant funding for downtown work.