2010-04-05-ATM-CPC-rpt - Laserfiche WebLink

Browse Search

ARTICLE 8 (u) Request: Busa Farm Debt Service CPA Category: Undesignated Fund Balance Amount Requested: $2,562,100 Amount Recommended: $2,562,100 CPC Vote: (9-0) Background: Under Article 6 at Special Town Meeting in 2009, voters approved the acquisition of the Busa Farm on Lowell Street. The motion for this acquisition(1) authorized the Treasurer to borrow $4,197,000 for the purchase of the land, (2) appropriated $98,000 from Undesignated Fund Balance of the Community Preservation Fund for debt service and related borrowing costs, and(3) authorized the Selectmen to lease all or part of the land for the next three years. Funding: To fund this acquisition, the Town issued a three-year bond for $4,197,000 in February of 2010. The first year of debt service (payment of principal and interest) will fall in fiscal year 2011 in the amount of$2,562,100. In fiscal years 2012 and 2013, debt service will be $974,600 and $930,300,respectively. Requests for funds to finance FY 2012 and FY 2013 will appear in the CPC Report for the next two years until the bond is paid off. As noted above, Article 6 of the 2009 Special Town Meeting specified that $98,000 be appropriated for debt service costs. A portion of this amount was for anticipated debt service on short term borrowing as well as for short and long-term financing issuance costs. Due to delays in the purchase of the property, it was determined that short-term financing was not needed. Further, it was determined that the $98,000 was not needed to cover the Busa portion of the issuance costs. The Busa bond was a portion of a $10,447,000 Town bond that was sold successfully at a$608,123 premium plus interest. The Town plans to use part of that premium and interest to cover the bond-issuance costs in total. Therefore, the $98,000 voted on at the 2009 Special Town Meeting will be returned to the Undesignated Fund Balance of the Community Preservation Fund. An update on the status of the Busa Farm project is given under"Status Report on FY 2010 CPA Projects"later in this report. 26