Savings On School Projects—

Latest Short-Term Bonds Come Cheap

By John Voket

Strike up the band! Newtown’s Finance Director Robert Tait said taxpayers can celebrate one of the lowest short-term borrowing rates in recent memory.

The finance director told The Newtown Bee Monday he obtained $12 million in Bond Anticipation Notes or BANs July 14 at an interest rate of 0.4380 — less than half of one percent — from Boston-based Eastern Bank.

Mr Tait said Newtown will pay that incremental expense until February when it will roll that short-term debt into a larger bond initiative of $24 million.

The BANs were incurred to cover the cost of modular classrooms that will be required at the high school. The installation of the “portables,” which the town will eventually own, are being supplemented to minimize student overcrowding, especially now as the facility is undergoing expansion construction.

The modulars, Mr Tait explained, are the lowest expense being covered by the BANs at just under $900,000. The highest, at $10.102 million, is the first phase of the aforementioned school construction, which will eat up the lion’s share of the remainder of financing.

The BAN’s balance will cover the latest and final year of the town’s open space acquisition borrowing, Mr Tait said.

He said the short-term borrowing is constructed to cover the expenses already authorized by the 2009–2010 budget, and were payable as soon as the new fiscal cycle began July 1, and could not wait until the major borrowing initiative in February.

The balance of that borrowing still needs to go through the multi-tiered vetting process by the Board of Finance, the council, then the selectmen before it is finally authorized at a town meeting. That expected February 2010 borrowing will purchase the town a new pumper fire truck, emergency communication system upgrades, the renovation of the Treadwell Park pool, Dickinson Park infrastructure improvements, and the parks maintenance facility upgrade.

Mr Tait said bonding for the Dickinson work will be phased between the 2010 and 2011 budget years with the first $150,000 of the total $620,000 authorized, to be borrowed this coming February to begin the work.