Council explains $3 million bond-anticipation note to bridge water-tower financing
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Summary
City officials said Article 2 asks voters to permit a short-term bond anticipation note up to $3 million to refund a $2.4 million construction line of credit and repay $600,000 in interfund loans tied to a voter-approved water tower project.
Article 2 on the Aug. 12 ballot would authorize a general-obligation bond-anticipation note not to exceed $3,000,000 to refund a $2,400,000 construction line of credit maturing in October 2025 and to refund interfund loans from the general fund to the water fund totaling $600,000. Mayor Rick Alfred Chase told attendees Aug. 11 the city is not seeking additional project authorization; voters previously approved the water-tower project in March 2021.
The mayor and council members said the $3 million request is a short-term step to bridge to a long-term bond—likely via the Vermont Bond Bank—once the city completes required paperwork and is placed in the bond bank’s next pool. Mayor Chase summarized the project’s original approval: “The new water tower was approved in March ’14 a little over 4 years ago. It was approved for … $4,985,000 minus any grants,” and he said roughly $2,000,000 of grant funding and ARPA funds reduced the net borrowing need.
Officials said they expect to arrange a long-term bond through the Vermont Bond Bank, with terms likely in the 20- to 30-year range, and that the short-term note being authorized would be a bridge with no penalty for early repayment if the long-term bond is secured. Finance committee members said the tentative debt service and interest payments have been factored into water rates for the coming year.
Discussion vs. decision: No council vote was held on Article 2 at the Aug. 11 meeting; the item was presented to inform voters before the Aug. 12 special town meeting. Council members and finance committee representatives stressed the request is a timing/bridge financing issue, not a new appropriation.
Ending: Council said it was in active contact with the Vermont Bond Bank and would submit paperwork in time for the bond bank’s next consideration round; residents were told the council expects additional rate and financing details to be available after bond-bank scheduling and final loan terms are known.