From the Town Administrator's FY 2027 Budget narrative, each department's story is worth sharing.
Type and Purpose of Debt
The Town of Franklin sells General Obligation Bonds to finance capital improvements and other projects that require large amounts of cash such as schools, public works, recreational areas, public safety, and public buildings. General Obligation Bonds are supported by the full faith and credit of the Town and are repaid from property taxes from both current and future property owners or, in the case of water or sewer projects, out of their respective enterprise funds. Over the last few years, typical rates for 20 year municipal bonds have been in the 3% to 4% range. With the current situation, rates may be more variable and possibly higher as less bidders compete in the marketplace.
Debt shall be issued only for capital improvements with a useful life equal to or exceeding the term of the financing. The Town will manage its debt in a manner that maintains a high credit quality, ensures long-term affordability, and limits the impact on taxpayers.
The Town’s most recent borrowing is a one-year Bond Anticipation Note (BAN) issued to fund the replacement of Fire Engine 3, with a total authorization of $935,000.
A BAN offers a cost-effective short-term financing option, as issuance costs are significantly lower than those associated with long-term bonds. This approach is particularly advantageous if the Town plans to reduce the principal over time or consolidate this borrowing with other authorized projects into a future bond issuance.
The BAN was authorized by the Town Council on March 4, 2026.
After a ratings review by Standard & Poor’s in May 2025, the Town’s bond rating was affirmed at AAA with a stable outlook.
FY26 Debt Service by Category
1. School Buildings – Franklin High School and Tri-County Regional Vocational H.S
2. Public Buildings – Senior Center, Library, Municipal Building Renovation
3. Technology - improvements to school and town systems
4. Public Safety – Fire Truck, Aerial Ladder Truck
5. Water Debt – Water mains, repairs, storage, lines and the water treatment plant through the Massachusetts Clean Water Trust Loan Program (MCWT)
i. MCWT is a state agency that improves water quality throughout the Commonwealth by providing low-interest loans to municipalities.
6. Sewer Debt – Beaver Street Interceptor, through MCWT.
Debt Service Trend Chart
The Town maintains a policy of limiting annual debt service to no more than 5% of the operating budget. Current debt service represents approximately 4.5%, reflecting adherence to this policy and a prudent approach to long-term financial management. Debt service is projected to decrease from FY27 to FY28, primarily due to the following factors:
● Horace Mann Middle School debt – both excluded and non-excluded debt service will drop off in FY27
● Final payments on major capital projects – debt associated with the Senior Center, Fire Station, and School issuances will reach their final payment in FY28, resulting in significantly lower debt service compared to prior years.
For reference, below is a summary of excluded and non-excluded debt retiring between FY23-FY28, including issuance and sunset years:
Continue reading this section to review additional text and charts in the PDF
For the full FY 2027 budget narrative - https://www.franklinma.gov/DocumentCenter/View/8912/FY27-Budget-Narrative-FINAL-1
The FY 2027 budget information can be found
