Portsmouth residents and advisors spar over whether post‑vote bond changes require public disclosure

The Portsmouth Town Council heard a sustained public debate Tuesday over whether major changes to a voter‑approved school bond should require formal public disclosure and council review.

Tom Green, a Portsmouth resident, told the council his petition asked for “discussion and action about a policy resolution or ordinance about changing a bond after it was voted upon,” saying the goal was not to prohibit changes but to ensure voters and the council are notified when material changes occur.

The issue prompted a staff presentation from Steve Mastroni, director at PFM’s Boston office and the town’s bond adviser. Mastroni summarized the bond sale: the General Assembly authorized school bonds in 2020 for about $21,400,000; the town sold serial fixed‑rate bonds of $19,510,000 on June 28, 2022, with an all‑in true interest cost (TIC) of 3.52% and a 23‑year structure that included three years of interest‑only payments. He confirmed the bonds were issued through the state conduit to preserve principal and interest reimbursement and warned of routine compliance requirements such as an arbitrage rebate calculation before project completion.

Residents and some councilors challenged parts of the presentation and the documents on the town website, arguing the bond’s final cash‑flow structure and the inclusion of capitalized interest altered the total debt service from what some voters and members expected. One speaker said the total debt service had risen by roughly $2 million compared with earlier projections; another, Larry Fitzmaurice, said it took him months to understand the financing schedule and that complexity undermines transparency.

Mastroni pushed back that the bonds are fixed‑rate serial bonds and that the industry standard blended TIC of 3.52% is the correct way to present the all‑in cost. “The blended TIC, which is an industry standard, is 3.52%,” he said. He also said net debt service and the projected tax‑rate impact were essentially unchanged from the 2021 projections and that capitalized interest was expected to be offset by investment earnings.

Council members debated whether the post‑vote changes met a practical definition of a “substantial change.” Some councilors said the adjustments—chiefly a nine‑month shift in principal maturity timing and the inclusion of capitalized interest—were within the scope authorized by the General Assembly and by practice; others said any change that meaningfully increases total debt service after a public vote should be returned for public review.

The council did not adopt an ordinance at the meeting. Several councilors said they preferred improved internal processes and earlier notice to the full council rather than a formal ordinance; the discussion closed without a formal change to policy.

What happens next: Councilors and staff signaled no immediate ordinance introduction. Council President and staff indicated future procedural refinements and clearer communication to the public and council could address the concerns raised.