Finance Director Authorized To Refund Bonds

By Jan Howard

A special town meeting vote Monday night approved a resolution that would authorize the town’s finance director, if the timing were appropriate, to refund bonds at lower interest rates.

Approved was a resolution, recommended by the Legislative Council, entitled “Resolution with respect to the authorization, issuance and sale of not exceeding $43,040,000 Town of Newtown General Obligation Refunding Bonds.”

First Selectman Herb Rosenthal explained that the town’s process that requires bids and approvals by town agencies often means that the town misses opportunities to refund bonds at lower interest rates.

He noted, however, that because interest rates are now rising, refunding at this time probably would not happen unless the rates changed again.

Mr Rosenthal said if the town could have acted quickly last year, it could have saved on interest costs.

Finance Director Ben Spragg said Tuesday that had this approval been in place last year the town might have realized budgetary savings of interest of as low as $100,000 or as high as $1 million or more.

“It’s ranged,” Mr Spragg said of the difference in savings. He said at the time he first spoke to the Board of Finance and Legislative Council about refunding bonds, the savings could have been between $600,000 and $700,000 in interest.

He agreed there would be no savings at this time because of rising tax rates, noting, “With this approval, when market conditions warrant, I will refund part of our indebtedness.”