The governing body approved a bond sale combining three ordinances with the intent to save on payments and, thereby, save taxpayers money in lower debt service payments. A municipal bond is issued by a municipal government to raise money for capital projects such as streets, large equipment expenditures, and other long-term purchases. Like a mortgage for a town, municipal bond gives funds to a town and in return, the municipality repays the amount with a scheduled rate of interest.
Chief Financial Officer Ken Blum explained at the September 20th municipal meeting that this resolution would authorize the bond sale for this year. It would combine two ordinances from this year and one from 2017. Last year’s ordinance – #2494 – was bonded for $2,117,000. The original debt was for $3,883,000 but $182,000 was removed from the final amount due to grant money that was received after the ordinances were approved. Last year’s bond was reduced by $168,000 and this year’s bond was lessened by $14,000. The new amount to be bonded is $3.7 million.
The average period of usefulness of this bond is 15.32 years.
In providing more information on this resolution, Mr. Blum stated, “There’s potential talk about having rates increased at the end of the year so we’re looking to jump on that and we’re going to have a drop off in debt service so in our professional opinions – between myself, bond counsel, and the auditor – we feel it’s the best time to go right now.”