Town of Charlton officials on the Finance Committee discussed plans to go to market for financing and bids for a proposed fire substation and highlighted several timing and financing conditions the town must monitor.

Town staff told the committee they met with the town’s financial adviser and learned that S&P Global Ratings recently changed criteria used for municipal bond ratings, placing more emphasis on regional median income and pension/OPEB funding levels. Staff said the town still expects to “probably still maintain a strong double A plus” rating but that moving to a triple-A rating looks unlikely under the new criteria.

Officials outlined a project and financing timeline. General-contractor bids for the substation were described as due Jan. 17; the town would have roughly 90 calendar days to execute a contract after bids are opened, and the construction period is expected to be about 18 to 24 months once ground is broken. On the financing side, officials said the town plans to time debt-service payments with tax due dates: an interest payment in November 2025 and the first combined principal-and-interest payment in May 2026, with FY2026 the first budget year expected to carry principal payments.

Committee members also said one remaining statutory hurdle is a pending special legislative act needed to permit acquisition of the parcel from the regional school district. A staff speaker described the issue as: “there's no provision in Mass General Law explicitly allowing a school district to sell property unless it's for an educational use,” and said the town is awaiting passage through the House and Senate before the end of the informal session; if it does not pass, staff said the town will refile and the schedule could slip.

Committee members asked whether the town could award contracts before ownership of the land is finalized; staff said the town cannot award a contract until it owns the land. Officials said financing for the project has already been advanced in prior votes that authorize going out to bid, but they also said that contractor bids that come in over budget would trigger a separate conversation about how to proceed.

The committee discussed how bond ratings affect the number of banks that bid and the overall borrowing costs; staff explained higher ratings generally attract more bidders and can produce better premiums and interest rates. Officials also discussed that Worcester Regional Retirement’s lower funded status compared with the town’s own OPEB contributions could affect the overall rating assessment.

No formal vote on the project or on additional borrowing was taken at the meeting; staff said the town will proceed with the planned bid schedule while monitoring the legislative and rating developments.