MEMORANDUM – OFFICE OF THE TOWN ADMINISTRATOR
TO: SelectBoard
FROM: Carter Terenzini, Town Administrator
RE: Upcoming Borrowing
DATE: November 1, 2017
CC: C. Richardson; K. Pontbriand; M. Carney
Our financial advisor has had preliminary conversations with Moody’s Investors Service relative to our seeking a rating for the Bond Anticipation Notes we are about to seek bids on. For Municipal notes the ratings are as follows:
MIG 1, best quality
MIG 2, high quality
MIG 3, favorable quality; and
MIG 4, adequate quality.
The initial reaction is that we will not be able to obtain a MIG 1 rating. There is a strong possibility we can achieve a MIG 2 rating but that is never certain until one formally submits the documentation for review. Even if we achieve a MIG 2 rating it is at least .25% above the interest rate of a borrowing rated MIG 1 rating. Our advisor has recommended, and I agree, that we not seek a formal bond rating at this time but instead finance our needs through unrated bank notes.
The maximum for this in this calendar year will be $10,000,000 which is more than enough to cover our needs ($5M BAN, $1M Police, $2.3 Sewer, $1.7 new money). This gives us $5.4M+/- for the school in CY ’18. We will then seek an additional $10,000,000 in CY 2019 and continue to work toward an acceptable bond rating as your financial picture slowly improves.
This approach will take continual monitoring of your cash flow needs and does not deflate the opposition to the projects based upon their concerns over our financial condition. However, it lets us get the projects underway, is not a negative of having submitted and not achieving a prime rating, buys us some time to improve how your financial condition is viewed by others, and keeps the pressure on to continue to make – and effect – the hard-financial choices that are needed to bring about longer term financial stability.
With respect to the actual bonding itself, Moody’s indicated that the underlying rating would be an A2. Moody’s could not get the Town to the highest note rating due to the amount of debt authorized and the lack of a cash coverage ratio to pay the notes off if you couldn’t issue Bonds. This is a highly unlikely scenario, but that’s their criteria. For your information I have attached a graphic for the Moody’s Bond rating system so you can see how A2 would compare to the overall rating system for investment-grade issues.
5 million + 1 million +2.3 million + 1.7 million = 10 million, so 10 million is more than enough to cover our needs (Templeton needs?) I seem to remember a 5 million dollar BAN being mentioned at the audit report, along with the words, "do not spend it" - more paid for advice being ignored and yet no selectmen speaks up on this? No selectmen speak against this? You have or will have bills totaling 10 million dollars and yet the words of the part time town administrator are "more than enough to cover our needs" Apparently those very aggressive things on a very aggressive schedule did not materialize. I an already see all the bobble heads nodding at Town Meeting, just the old pictures of the soviet politburo on the nightly news. Yes sir ree bub, Tempeton is moving ahead!
So when are the "hard financial choices" going to happen ? Last year I was told by Carter that this years budget was not sustainable for the next fiscal year. So when do the hard financial choices start ? How do we pay for the things we actually need with out the revenue to do it ? We have decades of road work that has been ignored because we did not have the funds. Our equipment that the Highway Department has is junk, because of the lack of funds. One question is why don't we hire men and equipment to plow snow ? I saw this add in the business section of the Worcester Telegram. "Seasonal Help Snowplow contractors wanted. Town of Sudbury Public Works Department is hiring Snow Plow Contractors for the upcoming winter season. Rates begin at $75.00 per hour depending on truck". Why doesn't anyone think about doing something like this ? It may seem like a lot of money but if a engine blows, it is not ours to fix. We would not have equipment that sits all summer while we pay for it. Just a thought ! I do not advocate putting our guys out of a job, but something has got to change. Our credit card mentality will do nothing but get us in trouble, make that more trouble. My opinion as a taxpayer and home owner, Town of Templeton.
ReplyDeleteWhen I first read this I was confused.Nothing has changed. As I understand this we are now going to avoid going for a bond rating anytime soon. Instead we are going to issue BAN's and distribute this money to the Elementary School, The Police department and Sewer (an enterprise account).
ReplyDeleteI assume the enterprise fund will be billed on their portion alone. I also assume that the borrowing for the enterprise will be proportionately reduced as stated in the financial policies.
This very much concerns me, why, well the Auditors mentioned just how complicated the borrowing will be for the school.They made some serious recommendations and it appears we have gone off track already by not hiring a certified treasurer, not hiring a fulltime qualified Town Administrator, spending the funds and commingling borrowings.
Seriously, all we have to do now is screw up the bidding and we are back to a few years ago and every other project we attempted to complete.
What the town actually voted for:
ReplyDeleteOn a motion duly made and seconded the Town voted to appropriate the sum of Nine Hundred
Seventy-Five Thousand Dollars ($975,000) to pay costs of designing, constructing and equipping
a 4,000 square foot addition to and remodeling of the Templeton Police Station, located at 33
South Road, and for the payment of all other costs incidental and related thereto; said sum to be
expended under the direction of the Selectmen; and to meet this appropriation the Treasurer, with
the approval of the Board of Selectmen, is authorized to borrow said sum under M.G.L. 44,
Section 7, or pursuant to any other enabling authority; provided, however, that no sum shall be
borrowed or expended hereunder unless the Town shall have voted to exempt the amounts
required for the payment of interest and principal on said borrowing from the limitations on taxes
by M.G.L. 59, Section 21C (also known as Proposition 2 ½).
Passed Unanimously/November 9th @ 8:33
-------------------
On a motion duly made and seconded the town voted to raise and appropriate, borrow
pursuant to any applicable statute, or transfer from available funds the sum of Two
Million Three Hundred Thousand Dollars ($2,300,000) to pay for the replacement of the
Pleasant Street sewer pump station; said sum is to be raised from sewer user charges and
fees, entrance fees, tipping fees paid by disposal contractors, betterments and other fees
and monies collected as per Sewer Department Rules by the Town of Templeton Sewer
Department.
Passed Unanimously/May 14th @ 12:49pm
------------------
Does Templeton have any ethical people in town?
ReplyDeletePlanning Board Members
Planning Board members are municipal employees covered by the conflict of interest law (Chapter 268A of the General Laws). All municipal employees, whether elected or appointed, full or part-time, paid or unpaid must abide by the restrictions of the conflict law.
The purpose of the conflict law is to ensure that your private financial interests and relationships do not conflict with your responsibilities on the Planning Board. The law is broadly written so that situations which even give the appearance of a conflict may be avoided.
ReplyDeleteI. Are you a municipal employee for conflict of interest law purposes?
You do not have to be a full-time, paid municipal employee to be considered a municipal employee for conflict of interest purposes. Anyone performing services for a city or town or holding a municipal position, whether paid or unpaid, including full- and part-time municipal employees, elected officials, volunteers, and consultants, is a municipal employee under the conflict of interest law. An employee of a private firm can also be a municipal employee, if the private firm has a contract with the city or town and the employee is a "key employee" under the contract, meaning the town has specifically contracted for her services. The law also covers private parties who engage in impermissible dealings with municipal employees, such as offering bribes or illegal gifts. Town meeting members and charter commission members are not municipal employees under the conflict of interest law.
Sounds to me like the town is not getting a bond rating any time soon from what is written here
ReplyDeleteAnon 2:45
ReplyDeleteI believe 2020, you know, when the interest rates are double now.
One bright spot - Moschetti and his band of thieves were thwarted. Hope he loses his shirt.
ReplyDelete@ Anonymous 4:32PM Just to clarify both change to zoning were defeated correct? I thankyou you ahead of time.
ReplyDelete