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Glen Cove considers $4.6M bonding in advance of grants

The Glen Cove ferry terminal, seen here on

The Glen Cove ferry terminal, seen here on March 24, 2016, still under construction, would benefit from a short-term bond the city plans to take. Photo Credit: Barry Sloan

The Glen Cove City Council holds a special meeting Tuesday night on whether to issue a $4.6 million bond.

The bond, called a revenue anticipation note, a short-term bond that an issuer plans to pay back with expected revenues. In this case, the federal and state governments have approved $4.6 million in grants for several projects in Glen Cove, but the city may not receive the money for months, Comptroller Sal Lombardi said.

“We’re looking to get the funding to have the cash to keep these projects moving,” he said.

About half the anticipated revenue is from grants for the new ferry terminal, Lombardi said. The rest is for other projects, such as the cleanup of Mill Pond and improvements to the city water system.

Thad Calabrese, an assistant professor of public and nonprofit financial management at New York University, said revenue anticipation notes are a common way for municipalities and school districts to raise money to avoid cash flow problems.

“There’s no reason not to do them if you’ve got those pledges from the federal and state governments,” he said.

Lombardi said the city receives the grant money as reimbursements, after work is completed, and it’s taking longer than expected to receive the funds.

The next regularly scheduled City Council meeting is April 12. Mayor Reginald Spinello said he called for the special meeting to expedite the bond issuance.

Asked if the city would have a cash flow problem if the council waited until April 12 to vote, Spinello said, “I don’t think that would be the case . . . why take that risk? There’s no need to delay this if it’s something we’re going to need.”

Lombardi said it can take several weeks from the time the council approves a bond until the city actually receives the money.

He said he expects the note would mature in December. If the grant money is delayed past December, the city could, if necessary, renew the note, he said.

The meeting begins at 7 p.m. at City Hall. It will immediately follow the first part of a regularly scheduled council work session, which will resume after the special council meeting ends.

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