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02/25/2019 08:16 AMWith the position that the impacts of climate change are a long-term liability, the Town of Branford is proactively setting up a new Coastal Resiliency Fund, seeded with $1 million in town money; and putting on a push at the state level to create legislation that would help Connecticut municipalities leverage coastal resiliency fund investment proceeds to earn a higher rate of return.
"Branford prides itself in that we've built a culture to address long-term liabilities, and it's recognized in our bond ratings and other areas," said First Selectman Jamie Cosgrove, speaking to The Sound on Feb. 19. "This is just another long-term liability [and] this is actually conservative budgeting. It's conservative in the terms of this is taking your dollars that you have now, and being able to invest them and maximize the use of those dollars."
Branford's current bond rating is AAA.
On Feb. 13, Branford's Representative Town Meeting, by majority vote, approved the creation of a Coastal Resiliency Fund and a recommendation from the Board of Finance to appropriate $1 million from the town's undesignated fund balance for its initial funding.
Going forward, a percentage of the town's property tax levy (to be determined) will be fed into the fund annually, and that percentage will be invested to help the fund grow further. Even as the town is investing to grow the fund, monies in the fund will be accessible to help address any rising waters/coastal resiliency needs the town will face over the coming years and decades. Having the fund in place, and growing, will also help the town to avoid the need to impose bonding or other borrowing to respond to infrastructure needs created by climate change.
"That's being on the right side of compound interest," said Branford Finance Director Jim Finch.
Finch developed the municipal investment plan prototype for the fund, and worked with Cosgrove to propose state legislation that would enable a greater percentage of fund investment proceeds to come back to the Town. Finch said the added investment flexibility the proposed state legislation could create for municipalities would potentially allow this type of fund to accumulate assets at a faster rate of 50 percent equity; vs. a rate of 31 percent the town can expect without the muscle power of state legislation. In addition, with bond rating agencies turning their attention toward how governments are addressing climate change and coastal issues, this legislation will demonstrate Connecticut's state and municipal commitment, Finch noted.
To assist at the state level, Cosgrove reached out to State Senator Christine Cohen (D, D-12) to seek legislation creating a Climate Change and Coastal Resiliency Reserve Fund. On Feb. 15, Cohen, who chairs the Senate Environment Committee, introduced the proposed legislation as a concept to the committee leadership. The response was commendable, Cohen told The Sound.
"The committee decided that we would bring it forth on the agenda, and the committee on the whole did vote to allow for a public hearing to take place, which is a really great step forward in the process of making a bill become a law. That's step one; and I would anticipate that we would be hearing it in mid-March," Cohen said.
Cosgrove and Finch are prepared to testify at the hearing in Hartford, when a date is set. Cohen said she is particularly proud to be forwarding an idea generated in her home district for enabling legislation to give Connecticut coastal towns a path toward funding for climate change and coastal resiliency needs.
"It's something that we need, and I couldn't be prouder of First Selectman Cosgrove for coming up with a plan to really address our climate change needs here on the coast. He's really a leader, and I think it will be great for the coastline of Connecticut to really follow that lead. And I think this legislation encourages those town to do that," said Cohen.
Cohen added the proposed legislation will not only prompt coastal towns in Connecticut to set up their own funds, but will also allow "... investment options and flexibility to really build up that fund. And also, the bond rating [impact] is very important. More and more rating companies are looking to see what these towns are doing about addressing climate change."
In 2016, the Town of Branford developed a Coastal Resiliency Plan prepared under a Community Development Block Grant Disaster Recovery (CDBG-DR) grant awarded to the Town for Connecticut for coastal resilience planning in Branford, Madison, and Milford, Connecticut. Most recently, Branford's updated Plan of Conservation and Development, which became effective on Feb. 1, 2019, calls for establishing a framework for addressing coastal vulnerability.