The following is a brief overview of the process to be used in the upcoming elementary school construction referendum, which is currently scheduled for October 7, 2008. The current estimated cost of the project is $46,232,545, of which an estimated $40,098,254 is eligible for state subsidy. The bond questions are worded such that Town approval of the project is contingent upon final approval of the state subsidy by the state Department of Education.
These projects can be quite complicated because they require compliance with three different sets of laws; the Town Charter, the state school construction statutes and the Internal Revenue Code regulations regarding tax-exempt borrowing.
Based on consultation with the Town’s bond counsel and registered financial advisor, the following three actions are required to be taken by the Council at its special meeting on August 19, 2008 in this order:
· A public hearing on the proposed order authorizing the school construction project (contingent on its eligibility for state funding) and further authorizing the issuance of bonds to fund the project.
· Approval of the proposed order authorizing the school construction project and authorizing the issuance of bonds to fund the project.
· Approval of the proposed order submitting the school construction project / bond order to referendum.
The wording for these orders (attached) has been prepared by the Town’s bond counsel, Jim Saffian of Pierce Atwood. We have also attached the actual wording of the referendum ballot. The wording of the ballot is strictly prescribed by state statute.
With respect to the two orders themselves, the first order is the comprehensive order which authorizes the project itself (under the Town Charter), specifies the expenditure amounts, and authorizes the Town Treasurer to issue bonds to fund the project, including various details on the borrowing that will allow the bonds to be classified as tax-exempt securities under the Internal Revenue Code.
The second order authorizes the above order to be submitted to referendum, per the requirements of state law and the Town Charter, specifies the date of the referendum, and contains the required (under state law) statement of position by the Town Council on the referendum question that is required to be included on the referendum ballot.
Finally, regarding the state approval process, the Council action on August 19 is subject to the state Education Department issuing its concept approval of the project on August 11. If the referendum is approved, final state approval of the final design and cost estimates will be required within nine months of the referendum, before actual project bidding and construction can take place. |
