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There’s been a lot of talk recently about “bonding” and “sending items to referendum.” What exactly does this mean to individual residents?
A municipal bond is issued by cities, towns, and other governmental entities. At its most basic level, a bond is a loan. The Town charter is very specific about the Town Meeting being “the legislative body of the Town” which authorizes “approving the issuance of bonds and all other forms of borrowing, the terms of which obligate the Town for a period of one year or more.”
At the same time, the Board of Selectmen must send to referendum any items desired to be purchased which aren’t in the regular budget and amount to more than “1% of the combined Town budget, excluding the budget of the Board of Education.” The Board of Finance must also have provided a recommendation on the approval of such expenditure.
So, in this year’s case, how does this all work? From the beginning …
Both the Board of Selectmen and Board of Education have spent the past year looking at services and programs, evaluating the items needed to continue to carry out those activities. During this time, the Board of Finance was reviewing capital needs of both boards and requested that they send their top priorities forward. After much deliberation, the Board of Education sent forward one item – to replace Bacon Academy’s track. What many don’t know is that the track has been falling into disrepair over the past five years and this request is one that the Board of Education has put forward over those five years – this is not a surprise.
At the same time, department heads and I worked together to analyze the Town’s needs. As a team, the department heads developed the Town’s priority list, headed by the need to replace a 27-year-old fire truck. The Board of Finance also requested a list of the Town needs in priority order. After much discussion, the primary need, as well as the subsequent list, was approved by the Board of Selectmen and sent to the Board of Finance in February 2009. Again, there were few surprises as much of this list has been on the Capital Improvement Plan (CIP) list for over five years.
The way the process works is that the Board of Selectmen send their recommendations to the Board of Finance, who then decide how much we can afford and how we will fund the items. Consequently, the Board of Selectmen sent the fire truck and the track to the Board of Finance as priorities, with the list of additional needs as requested by the Board of Finance. At that time, it is within the Board of Finance’s purview to decide whether to move forward any, all, some, or none of the recommendations to bond counsel to provide a detailed plan for financing and analysis of impact on Town finances. After a presentation by our bankers, Webster Bank, the Board of Finance voted to move forward on the fire truck, track, road improvements, ambulance, and technology. Why? Although the economy is down, this is a good
time to bond. Interest rates are low; it’s a good environment as bonds are stable and trusted investment options; municipal rates are low; and, given where we are in the debt cycle, bonding this amount at this time will have no impact to the mill rate during the 2009-2010 fiscal year. The Webster Bank presentation can be found at www.colchesterct.gov.
We will be receiving the financing details from bond counsel this week. Once again, both the Board of Selectmen and Board of Finance have to vote on which items will be moved forward to a Town Meeting and/or referendum (as appropriate) – again, it could be all, some, or none. Once both boards have taken action, it’s up to you. Each item approved to move forward will be a separate question on the ballot in May. As always, I urge you to vote, to make your voice heard. Government is about people – it’s about you.
Previous Selectman Notes can be viewed at
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