Marlborough finance committee approves $581,007 transfer to cover bond anticipation note interest

The Marlborough City Finance Committee on May 1 approved a $581,007 transfer from free cash to the short-term interest account so the city can pay interest due on a bond anticipation note issued May 22, 2024.

Comptroller Brian Doheny told the committee he discovered the bond anticipation note (BAN) had an interest payment due that was not covered by any existing line in the fiscal 2025 budget. “As I was getting the budget ready … I noticed there was a ban that was taken out last year that had an interest payment due of 873,000,” Doheny said, and staff identified roughly $253,000 in another account that could be applied toward the bill but not enough to cover the full amount.

The committee’s approval moves $581,007 from free cash into the short-term interest account so the payment can be made on time; Doheny said the BAN payment is due June 1. He told members the short-term interest line is included in the FY26 budget at $325,000 so next year’s budget should cover future short-term interest costs.

Councilors and staff discussed possible consequences had the payment not been caught: Doheny warned that failing to document a dedicated account could trigger state review for deficit spending and could harm the city’s bond rating. “If you do not pay on your debt service … it will cause problems,” he said, describing the risk to future borrowing costs and bond ratings.

The committee moved and seconded the transfer and voted in favor; the clerk recorded the vote as carrying “4–2–0.” The approval also included a procedural suspension requested by the administration to expedite processing.

Committee members asked staff to ensure the short-term interest line is present in future budgets and thanked Doheny for identifying the discrepancy quickly.

The transfer will be executed by city finance staff and reported to the full council as part of routine budget transfers and year-end reconciliations.