Town to Support Heron Point Bond Issue

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Chestertown Council members, from left: Marty Stetson, Rev. Ellsworth Tolliver, Town Clerk Jen Mulligan, Mayor Chiis Ceriono, Town Manager Bill Ingersoll, Linda Kuiper, David Foster

The Chestertown Council, meeting Aug. 8, approved a resolution in support of a bond issue for the Heron Point retirement community. A hearing on the issue preceded the regular meeting, at which attorney Lindsey A. Rader of Funk & Bolton presented the terms of the issue in accordance with the federal Tax Equity and Fiscal Responsibility Act of 1982.

Rader said that the town would assume a pass-through status on the bond issue, which Heron Point is using to get more favorable rates on existing debt. She said the town would have no liability for the bonds, which could amount to as much as $26,250.000. The interest rate could be from 0.5 to 3 points lower than the open market, depending on the details still to be negotiated. The bond issue would also be tax-free because of the town’s sponsorship, she said. Also, the term of the loan would be “no longer than 30 years,” almost twice as long as terms available otherwise. Heron Point would pay all transaction fees, including Rader’s stipend.

Lindsey Rader of Funk & Bolton

Town Manager Bill Ingersoll said the town has entered into similar arrangements in the past, with Heron Point and with Washington College. He described it as being a “good neighbor” to local institutions.

Councilman Marty Stetson asked whether the town should get a fee for acting as an intermediate. He said the town has had to institute budget cuts and a tax increase, and a fee would be to its advantage.

Ingersoll said that if the town asked for a fee, Heron Point could turn to the Kent County Commissioners or some other entity to get the same terms without a fee. He said it had happened once before when the town tried to get a fee for acting as conduit on a TEFRA bond. He said that Heron Point is paying town real estate taxes on 60 percent of its property, “all except the main building.” If the town intended to charge a fee, it should have been agreed on in advance, he said.

Rader said that the town had collected a fee for a TEFRA bond issue once before, with Washington College. She said the fee was negotiated in advance. She said that it was unusual in her experience for the sponsoring entity to charge a fee, though some do it more frequently than others.

Mayor Chris Cerino said that Stetson’s point was valid. He said the town should make it a policy to ask for a fee for such transactions in the future.

Ingersoll asked if the bonds would be available to the general public.

Rader said the bonds are to be held by the lending institution. She said the most recent Washington College bond issue had been made available to local investors. Also, she said, if the bonds are not issued by December, the town has the option to drop out of the deal.

The council approved the resolution supporting the bond issue without dissent.

In his Town Manager’s report, Ingersoll said the town had completed the application for federal grants for $4.5 million to do repairs and upgrades to some 13.4 miles of town streets. He said the grants, from the U.S. Department of Transportation, were aimed at improving highway safety. The town has requested money for signage, crosswalks, handicapped ramps, speed bumps and other features in addition to repaving the streets. A storm drain for the downtown area is also on the wish list. He said the town had the support of the Kent County Commissioners and the delegates to the General Assembly.

Ingersoll said he was “really enthused” about the possibility of receiving the grant, which would be determined in December. He said it would relieve considerable budget pressure on the town. The BUILD grants, as they are called, are awarded on a competitive basis and each state has a $150 million cap on awards within that state. There is a maximum of $25 million for any given project.

Ingersoll thanked grant writer Linda Kohler of Chesapeake Charities for her help in preparing the application.

Chestertown Police Chief Adrian Baker

Also at the meeting, Police Chief Adrian Baker gave a brief report on a shooting incident near the intersection of Lynchburg and Calvert Streets. The incident, which took place in the early hours of Aug. 7, resulted in non-life-threatening injuries to two victims. Baker said the shooting was apparently the result of “some disagreement,” but details were unclear since neither of the victims was cooperating with the investigation. The investigation is ongoing, he said.

Councilwoman Linda Kuiper reported that Danya Benton and Kailee McCoy, the daughters of the late Owen McCoy, have asked to take over his position as manager of the Chestertown farmers market. She said they have already begun to take over some of the duties of the position, including collecting the participants’ fees and delivering them to town hall. Kuiper said she had been assisting them with some of the details of the work, because they had two family funerals and a newborn baby in the last couple of weeks. The position pays $1,000 annually, which the two daughters would share.

The council voted to appoint the daughters to the position of manager on an interim basis, through the end of the current year. The town is working on a new contract for the market, with several details to be worked out, Kuiper said.

Stetson reported on problems he has had with Atlantic Broadband, saying he was kept on hold for so long that his phone battery ran out, and that he had sent several emails without receiving a reply. He said since the broadcast of the video of the town meeting is carried by Atlantic Broadband, “Maybe somebody will see it and get back to me.”

The council also heard a report on the status of the movie theater at Washington Square Mall, which was to have opened this month. The Spy will publish details as they become available.

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Letters to Editor

  1. Marty Stetson says:

    The article makes it sound like we did not issue the bond to Washington College, but we did and they paid something around $ 50,000.00. in a fee. Even with a fee they would receive a much more favorable rate than if they went to the open market. I believe we have an obligation to ease the tax payer’s burden when ever we can.

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