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2017-03-12-AC-STM-rpt
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2017-03-12-AC-STM-rpt
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12/14/2022 4:21:37 PM
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3/13/2017 8:43:13 AM
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2017
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Appropriation Committee
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Town Clerk
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Town Meeting APPROPRIATION COMMITTEE REPORT TO THE MARCH 2017 SPECIAL TOWN MEETING 2017- 1
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has the option either to: (i) appropriate the premium up front to lower the amount of the borrowing; or (ii) <br /> reserve the funds for future appropriation to another, similar capital project for which borrowing may be <br /> authorized for an equal or longer term. <br /> Premiums from February 16,2017 Bond and Note Issuance <br /> At the recommendation of the Town's finance staff and bond counsel, it is proposed that option (i)be fol- <br /> lowed for all premiums received in connection with the Town's most recent sale of bonds and notes on <br /> February 16, 2017, whether for exempt or non-exempt debt, i.e., that the premiums, net of issuance costs, <br /> be applied up front to lower the amount of the associated borrowing for which the premiums are received. <br /> This is a cleaner and simpler approach, and helps to assure that legal obligations are satisfied without the <br /> need for inordinate tracking and paperwork.Thus: <br /> • The low bid for a proposed bond issue of$47,423,000 included a premium of$2,041,133, for a <br /> TIC of 3.06%. After applying the bond premium, net of issuance costs, the amount borrowed is <br /> reduced to $45,423,000. <br /> • The low bid for proposed BANs totaling $13,426,052 included a premium of$38,956, for a TIC <br /> of 0.96%. After applying the premium, the amount borrowed, net of issuance costs, is reduced to <br /> $13,387,096. <br /> It is anticipated that all future warrant articles authorizing within-levy debt will include a clause providing <br /> for the application of option (i) to bond premiums if so recommended by the Board of Selectmen. In ad- <br /> dition, option (i) will be used for in-levy debt that has been previously authorized by the 2016 Town <br /> Meeting but for which bonds/notes have yet to be issued. When option (i) is applied to borrowing that <br /> includes both exempt and non-exempt debt, the premiums will be applied strictly pro rata to all borrow- <br /> ings,both exempt and non-exempt, for which they are received. <br /> The Committee unanimously recommends approval of this article(9-0). <br /> 9 <br />
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