Bond Refinancing Lowers Town’s Financial Obligations

The Finance Department’s Municipal Obligations budget was reviewed at the Town Council’s April 30 budget meeting.
Chief Financial Officer Frank Childs presented the working budget of $1,976,335, at the time of the meeting up $33,690 over last year’s $1,739,645.
However, Childs announced immediately that he was able to lower the number by $35,000. The town had just conducted a refinancing of two bonds, one for $4.75 million and one for $1,160,000. The first bond went from 3 percent interest to 2.019 percent interest, and the second, from 2 percent to 1.01 percent. The bond sale produced a $35,000 cut in what had been anticipated for bond payments.

“It was a good day in the market,” Childs said. Councilor Tom Cardon asked about legal services, which is budgeted at $250,000. “Does it vary?” he asked.
Town Administrator John Anderson said it was higher 2 1/2 years ago but that the larger cases against the town have been resolved.
“Unfortunately,” Anderson said, “we can’t always control who sues us.”

Cardon wondered if the town had considered hiring its own attorney. Anderson said they had “priced it out,” but came back to the current system because having a dedicated attorney might mean the town would have to go elsewhere if it needed a certain specialty. He said the town saved an estimated $20,000 by not having an attorney of its own.
The bond sale reduced the debt service line from $996,386 to $960,754, and reduced the total Municipal Obligations line to $1,940,703. The Council voted 6-0 to accept this budget.

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