A promise based on a promise

The quite convoluted Article 7 goes to great lengths to impress us with the Friends intention to donate $750,000 to the project.  I have no doubt as to the sincerity of  the donors who pledged funds to the Friends, and expect that they will follow through.  But lets look at the structure of the deal.

The promise made by the Friends isn’t the promise made by the donors.  That is to say, the donors pledged to give money to the Friends.  The pledge form simply asks people to pledge money to the Friends “To support the rehabilitation of the Wolfeboro Town Hall”.  It doesn’t say anything about giving the money to the Town.

The warrant article asks the voters to accept $750,000 to be used to reduce the amount “needing to be bonded” whatever that means.  I’m not sure what the legal distinction is between the amount to be bonded, and the amount “needing to be bonded”.

At the deliberative session, the question was asked if the pledges were “legally binding”.  Their lawyer got up and said yes, they are.  As I read it, the warrant only authorizes the town to accept any such gift.  It does not, and cannot, require the Friends to offer it.

Even if the pledges of individuals to the Friends are legally binding, do you think the Friends would vigorously pursue any default, given that they are not bound to produce it to the town?

What nags at me is that the Friends were not confident enough in their pledges to just simply reduce the bond authorization, even by a single dollar.

Lets imagine that if this passes and the project, through whatever develops, exceeds $4 million.  As I read it, the Friends are free to renege on their gift of cash, and use their pledges to directly finance part of the work.  Maybe there’s a scenario where the Friends donate some money to show good faith but cite unanticipated circumstances to withhold some of the funds to use directly.

Their pledge form lets their donors out if the taxpayers don’t approve this warrant and authorize $4 million.  Wouldn’t it have been better if the warrant article were written in such a way as to give the taxpayers an out if the Friends don’t reduce the $4 million by $750,000?

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One Response to A promise based on a promise

  1. suzanne ryan says:

    Convoluted warrant article 7 is an understatement…..who ever composed it should go back to
    the basic law of budgeting in gross. Typically the GROSS amount is in the 1st paragraph (although
    not legaly required if done as “and further to raise” wording. But I am sure the powers that be
    wanted to keep the first number as low as possible.
    Bet the Department of Revenue will have a field day with
    trying to figure this one out..although it will pass muster, it is not standard wording. Most towns
    send (free of charge vs Atty Puffer) the draft WA for DRA to assist/review for wording, but our
    TM sees no purpose in this (when I asked at last years delib session)

    However, one thing that the general public does not realize is that..amounts of money CAN be
    transfered OUT of the operating budget and INTO a special WA . The prohibition on transfers is
    out of a special WA to another budget purpose. Also as most know, the funds from a WA can not
    be spent for any other purpose. See RSA 32:10.

    One other small thing…….no one has mentioned the ADDITIONAL small sum of new money $11,300
    IN ADDITION to the 4 mill to be raised…that will be for a brief period of borrowing until we bond.
    So, we will be raseing $4,o11,300 to be off set by what ever comes in…it’s a crap shoot on that score.
    And you are absoultly correct, if this passes the BOS are authorized to spend 4 mill as..the only
    wording that is limited is on bonding (not to exceed)

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