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02/02/2017 AC Minutes 4. Planning for Annual Town Meeting (ATM) and Special Town Meeting Reports Mr. Bartenstein reviewed the processes for creating this Committee's report and his tentative assignments for its preparation. Each article that has budget implications has been assigned an author and a reviewer, who are responsible for submitting a consensus write -up that is shared with the rest of this Committee for final approval. Committee members may switch assignments, if desired, keeping Mr. Bartenstein informed of such changes. Articles with recommended bylaw changes could have financial implications and will be addressed in the report, as appropriate. Mr. Bartenstein discussed the Town Moderator's recent practice of creating a consent agenda with multiple articles to be presented in one motion for Town Meeting approval. Only items supported unanimously by the Board of the Selectmen and the finance committees are considered for inclusion. If any article is questioned on Town Meeting floor, it is removed. 5. Appropriation of Bond Premiums (STM Article 5 and ATM Article 22) Ms. Kosnoff provided the Committee with background on articles which have been included in the warrant for both the Special Town Meeting (STM Article 5) and the Annual Town Meeting (ATM Article 22) proposing the appropriation of bond premiums to be applied to reduce the borrowing costs of projects for which the bonds are issued. Ms. Kosnoff explained that it is common, in connection with the issuance of public or private sector bond debt, for underwriters to specify that the bonds will be issued at a stated interest rate based on the bond's "par" value, but to effectively adjust the interest rate paid by the borrower upwards or downwards, depending on market conditions, by selling those bonds at a premium or a discount. When a bond is sold at a premium, the effective interest rate paid by the municipality is typically lower than the stated interest rate on the bonds. This market practice raises the question what a municipality should do with a bond premium when one is received. Until recently, premiums for bonds issued for debt within the levy went into the General Fund and could be appropriated for any purpose; premiums for bonds issued under a debt exclusion, on the other hand, had to either be reserved and applied to defray the future debt service costs of the particular borrowing for which they were received, or appropriated up front to defray project costs. Under the Municipal Modernization Act, which became effective on November 1, 2016, the rules have been changed slightly for both exempt and non - exempt bond debt authorized and sold after that date. In the case of debt that is exempt under Proposition 21/2, the bond premium must be appropriated up front to defray the project costs. In the case of within -levy debt, the municipality has the option either to: (a) appropriate the premium up front to defray project costs; or (b) reserve the funds for future appropriation to another, similar capital project for which borrowing may be authorized for an equal or longer term. Ms. Kosnoff reported that next week the Town will be issuing a bond for approximately $47.0 million for projects previously approved by Town Meeting; and approximately $13.0 million Bond Anticipation Notes will also be issued, and together these notes and bonds are likely to generate substantial premiums, perhaps in excess of $1 million. Starting immediately, motions for funding projects will include language identifying how a premium associated with the bonding for the project is to be used. Ms. Kosnoff has recommended, and STM Article 2 and ATM Article 22 provide, that in the case of both exempt and non - exempt debt, the Town apply any premium, net of issuance costs, to reduce up front the amount of borrowing for the particular project for which the 2