Franklin Debt Service

One of the fiscal policies Franklin operates with is using up to 3.5% of the general funds for debt service. This is an easy way to fund medium term capital projects without getting a debt exclusion approved. This has allowed the new fire stations, the Senior Center and other building or renovation projects to occur. The worksheet use to calculate the FY 2014 debt as a percent of the general funds can be see below. This was reviewed with the Finance Committee during their December meeting.




This worksheet also handed out and reviewed with the Finance Committee at their December meeting, is more of an eye challenge. The current available capacity is gradually growing and will be almost $1M by 2016.

"considered high quality by all standards"

Towns with a higher bond rating are more likely to be able to pay off their loans, and as such are often given a lower rate of interest on their bonds. 

"On smaller projects, a few (percentage) points isn’t going to matter too much," said Ballantine. "But if you’re building a high school, it can make a significant difference." 

Much like there are three main credit bureaus for personal credit scores, there are three main bond rating agencies — Moody’s Investors Service, Standard and Poor’s, and Fitch Group.

Read more: http://www.metrowestdailynews.com/news/x521655892/Despite-recession-area-municipal-bond-rates-in-good-shape#ixzz23KDAVE3B

Franklin has been able to maintain a very good bond rating with its overall budget management. This will be a major factor as the new high project goes out to bid for the bonds to finance the building. Of course, the timing for the actual construction bids will hopefully produce the lowest overall cost for the project as well.

Franklin is also aggressive in managing its debt to take advantage of the lowest ratings available. It was able to perform two refinancing exercises that substantially reduced the amount of interest that would be paid over the life of the bond. The most recent of these efforts was reported on during the FinCom meeting in April
http://www.franklinmatters.org/2012/04/live-reporting-fincom.html

Jeff Nutting on the Capital Outlook (audio)

Town Administrator Jeff Nutting outlines the capital needs for the near future and gets into discussion with the Council on how this could be done with either cash, grants, or debt.

Time: 51 minutes, 57 seconds



MP3 File