Authorization under M.G.L. c. 44, s. 20 to apply bond premiums (less cost of issuance) to project costs and reduce the amount authorized by said reduction

Petitioner: Board of Selectmen

Annual Town Meeting, May 2017

The Municipal Modernization Bill provides communities with the ability to change how to treat bond premiums (net of issuance costs). Prior to the change in law bond premiums that were not related to a debt exclusion were booked as general revenue of the Town and made available in the form of Free Cash after the close of the fiscal year. Bond premiums related to debt exclusions already have the requirement of offsetting the cost of the project, ensuring that the amount raised in taxes for the borrowing reflects the true cost of the project.

Communities can now apply bond premiums (net of issuance costs) to the issuance, thereby reducing the amount needed to borrow. The borrowing authorization would also be reduced by the same amount. This provides the benefit of allowing the Town to benefit from the proceeds immediately instead of waiting for Free Cash to be certified.
Official Town Meeting Vote Select Board Advisory Board

Favorable Action

Favorable Action

Favorable Action

Unanimous

5-0-0

18-0-1
Final Result:

Favorable Action
Community Organization Recommendations
PAX Green Caucus
Official Text of the Article

VOTED: That the Town will vote to supplement each prior vote of the Town that authorizes the borrowing of money to pay costs of capital projects to provide that, in accordance with Chapter 44, Section 20 of the General Laws, the premium received by the Town upon the sale of any bonds or notes thereunder, less any such premium applied to the payment of the costs of issuance of such bond or notes, may be applied to pay project costs and the amount authorized to be borrowed for each such project shall be reduced by the amount of any such premium so applied


https://www.brooklinema.gov/DocumentCenter/View/12224/Combined-Reports-May-2017…

Categories: