HomeMy WebLinkAbout2011-08-16 Finance Committee Minutes
Finance Committee
August 16, 2011
Minutes
Councilors: Durgin, Blanchette, Nealley, Weston, Palmer, Gratwick
Staff: Cyr, Webb, Kochis
1. Finance Committee Resolution Approving the Details of the City’s $5,510,000*
2011 General Obligation Qualified School Construction Bonds (*Preliminary, subject to
change)
Councilor Durgin chaired the meeting until the absence of Councilor Bronson.
Cyr said that Qualified School Construction Bonds are taxable City bonds, but the
interest rate is subsidized by a federal program. The federal subsidy rate is established
on a daily basis. With the market volatility last week, the City stayed out of the market.
This morning the City went back out into the market, had a good amount of interest,
and had an investor who wanted to purchase the entire the issue. The tax credit rate
came up this morning at a 4.55. The City had been shopping for 4.50, and this investor
agreed to take it for 4.65. The City will end up paying ten basis points, a .10 interest.
The impact on the School Department from a budgetary standpoint for FY12 is $2,182.
The Finance Committee is required the approve the details which basically is to issue
$5,610,000 of General Obligation taxable Qualified School Construction Bonds and the
interest rate is 4.65% for a period of 17 years.
Councilor Gratwick joined the meeting.
Responding to Weston, Cyr said this is the total amount that will be put out. The
logistics of the competitive process is to put in an application for all projects with an
estimated cost. After the fact, the list of projects cannot be changed. The $1.4M that
won’t be used will go back to the Department of Education to be redistributed. The
st
bonds all have to be issued by December 31 for this allotment.
A motion was made and seconded to approve the total amount and the interest rate for
this issue. Nealley commended Cyr for her due diligence.
The Committee adjourned at 5:00 pm.