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Board hears long-term debt model and options: bond premium, term changes, BANs and refunding discussed
Summary
Municipal advisors and bond counsel briefed the Simsbury Board of Finance on a 15-year debt-service model and options to smooth future spikes, including using bond premium, changing amortization terms, issuing bond anticipation notes and timing new issues to fall when debt falls off.
Municipal advisors and bond counsel presented a long-term capital and debt-service model to the Board of Finance on Oct. 21 and outlined tools the town can use to manage future spikes in borrowing costs.
Glenn Breibach of the law firm Coleman & Conley, identified as the town’s bond counsel, and Barry Bernabe of Phoenix Advisors, the town’s municipal advisor, walked the board through a spreadsheet staff developed that projects operating budgets, debt service, and future bond issuances roughly 15 years out. Amy (finance staff) explained the model’s assumptions, including a 3% annual increase in operating budgets and a preliminary borrowing-rate assumption (4% in early years, dropping to 3.5% in later years for modeling purposes).
The presenters stressed several practical levers to manage spikes in debt service: using bond premium to mitigate near-term payments,…
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