Kent’s Landing payments to spike

 

TOWN OFFICIALS turned down state money and took out a bond to pay for the Kent’s Landing purchase. This arrangement allows the Naples Town Beach to be used exclusively by taxpaying residents. (De Busk Photo)

TOWN OFFICIALS turned down state money and took out a bond to pay for the Kent’s Landing purchase. This arrangement allows the Naples Town Beach to be used exclusively by taxpaying residents. (De Busk Photo)

By Dawn De Busk

Staff Writer

NAPLES — Ouch. It is like a very expensive Band-Aid that is being pulled off far too slowly.

The cost of Kent’s Landing has just spiked upward.

That’s because the annual land purchase payments have come due. The payments are for a loan taken out with Maine Municipal Bond Bank (MMBB) six years ago. The waterfront parcel, which allowed the expansion and improvement of the Naples Town Beach, was purchased for $750,000 in 2010.

For six years, the Town of Naples has been paying about $16,000 a year in interest only. That has been done in two payments – one due in May and the other in November.

Going forward, every November, the annual bill will be more than $40,000. By 2026, the payment on the bond will be more than $46,000. The interest rates increase each year from 3.8% in 2016 to 5.1% in 2021. In addition to the bond payments for the next 20 years, the town will continue to make interest-only payments of slightly less than $10,000, which will be due in May.

Naples Budget Committee Chairman Jim Turpin said this is an example of fiscal mismanagement.

It is fiscally irresponsible for the town to not pay a single penny toward the principal in the six-year period since the property was purchased, he said.

“Kent’s Landing has been a money pit all along and will be all the more so now that $40,000 in yearly payments against (the) principal will need to be accommodated within the town budget,” Turpin said in an e-mail.

“It appears to me that Kent’s Landing will cost the Town of Naples in the range of $100,000 per year going forward,” Turpin said.

He commented that he did not see a positive cost-benefit ratio.

Also, Turpin questioned the purchase price of $750,000 for a piece of property that was actually valued at $717,000, he said.

Then, to top it off, the existing building was removed, “leaving the town with a piece of land worth $537,750 (less than we paid for it, much like the Begin lot) at the bargain price of $750,000 plus interest,” Turpin said.

According to his calculations, the Naples taxpayers will end up shelling out $1,260,000 for the land purchase.

Kent’s Landing, which is part of the town beach parcel on Long Lake, is for the exclusive use of Naples residents. Therefore, there is no user fee for nonresidents; they simply are not allowed on the beach. Without a user fee, there is no mechanism to bring in some revenue to the Kent’s Landing account.

During the 2015 Town Meeting, residents did approve a fee for nonresidents who use the boat ramp. That was not put into play during the course of this summer. But, it is still a viable option for future boating seasons.

The Kent’s Landing payments were brought up during a Naples Board of Selectmen meeting on Feb. 22. The first payment was actually due several months ago in November, according to Town Manager Ephrem Paraschak.

It was a bill that came as a surprise, Paraschak said.

Since the first payment on the bond was due November 2015, it was unclear what fund was used to make the payment. The land payments had not been part of the 2015-16 budget for this fiscal year.

Paraschak said payments of $40,000 will need to be worked into the proposed budget, which goes into effect July 1.

During the Feb. 22 meeting, board members tried to remember the history of the borrowed money. Most agreed a loan was taken out during a period in time when the town did not have enough money to buy the Kent’s Landing parcel. Derek Goodine was town manager in 2010 during the land acquisition.

“I suspect at the time the town didn’t have the money. They had to purchase it really quickly,” Paraschak said.

“Literally, I got the bill in the mail,” he said, adding, “All bonds have interest and principal, and it is planned out.”

Since the purchase was approved at the Town Meeting or a Special Town Meeting, there would be accompanying paperwork for the bond payment plan, Paraschak said.

On Monday, Chairman Bob Caron II found the website link for the MMBB payment schedule, which dated back to May 2010.

According to that document, the town will receive $176,400 in subsidy credits.

On Feb. 22, Selectman Dana Watson recalled one piece of information about the bond.

“This was the year we were going to get hit with payments,” Watson said.

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