Board of Selectmen authorizes $60M in refinancing bonds
Published 4:02 pm, Wednesday, April 22, 2015
With an eye to making the most of the town's bond rating, the Darien Board of Selectmen voted Monday to approve up to $60 million in bonding to pay off the town's debt at lower interest rates if the opportunity arises in the coming year.
The financial maneuver has saved the town millions of dollars since 2008, when the town began preapproving an upper limit for refinancing bonds, officials said.
While the town has no specific designs on issuing the bonds right now, Town Finance Director Kate Clark Buch and First Selectman Jayme Stevenson said approving the upper limit in advance allows the town to move quickly when it spots an opportunity to refinance debt.
They said refinancing bonds in recent years has saved taxpayers millions in interest costs and is part of a strategy to keep the town on a stable financial footing.
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The practice began in 2008, when a proposal to issue refinancing bonds couldn't get the necessary town approvals in time to take advantage of the lower interest rate, Buch said.
"It allows us to take advantage of the market and react quickly, should a refunding opportunity come up," Buch said. "If we waited until an opportunity came up to pass the authorization, we run the risk of the market turning and losing that opportunity before we can get through the whole process of getting a refunding authorized."
The town most recently took advantage of the markets when it issued $33.6 million in bonds to refund $35.2 million in bonds before their maturity, resulting in $4.58 million in reduced interest payments.
The town has worked to reduce its outstanding debt in recent years, reducing its debt from general obligation bonds from $99 million in 2012 to $89.4 million in 2014. Much of the town's debt in the past decade has been associated with major work, such as the Darien High School rebuild, the Darien Police station, and sewer projects.
At the meeting, the board also approved $505,000 in short term bonds for capital projects, which includes $228,000 for a new cutting-edge police boat with more modern rescue equipment, including a night-vision system and side-scanning sonar that would improve search-and-rescue efforts. It also would pay for a new heating system for the Board of Education's administrative offices at 35 Leroy Ave.
The board also approved appropriations for $705,000 to plan, design and carry out various road repair and resurfacing, parking lot construction, and sidewalk extension projects.