Oyster Bay has indefinitely postponed a $30 million cash flow borrowing that had been scheduled for this month.
Oyster Bay finance director Robert Darienzo said the postponement came about because of a settlement with Nassau County approved by the town board earlier this month over erroneous property tax assessments on utility-owned property in town garbage districts.
“The settlement with the county provided an opportunity to delay borrowing and reduce any unnecessary financing costs,” Darienzo said. “Any borrowing later this year will be reduced by the amount received by the county.”
The county legislature approved the settlement on April 25. On May 10, Darienzo had said the borrowing was going forward with TD Securities as the underwriter. The borrowing had been planned before the town’s downgrade to junk status by Standard & Poor’s on April 27.
Under the settlement, Oyster Bay agreed to accept $26.7 million from the county in return for dropping legal claims of more than $37 million — the amount the town borrowed to settle lawsuits from Verizon and KeySpan. The settlement also resolved cases brought against Oyster Bay by New York Water Service Corp., MCI Metro Access Transmission and Sea Cliff Water Co., according to the county. Under the settlement, the county will pay the town half of the money this year and the remainder next year.
The town will need to borrow $72.5 million in July when short-term notes come due. The town hasn’t decided whether it will renew the notes for another year or convert the debt as long-term bonds, Darienzo said.