2011-02-23-AC-min - Laserfiche WebLink

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February 23, 2011 Minutes Town of Lexington Appropriation Committee February 23, 2011 Place and time: Town Office Building, Room G-15,7:30 p.m. Members Present: Glenn Parker, Chair; John Bartenstein, Vice Chair and Secretary; Robert Cohen; Alan Levine; Susan McLeish; Eric Michelson; Rob Addelson (non- voting, ex officio) The meeting was called to order at 7:50 p.m. 1. Liaison and Staff Reports. Board of Selectmen (Rob Addelson and Susan McLeish). Two topics of interest discussed at the most recent meeting of the Board of Selectmen were a recent $4.7m bond issue by the Town and final approval of the recommended FY2012 budget. o Bond Issue. Mr. Addelson reviewed the highlights of the bond issue for the Committee. The process began with a ratings conference call with Moody's that resulted in reaffirmation of the Town's Aaa rating. (The Moody's report will be posted on the Town web site.) The bond issue was then put out to bid. A total of 9 bids ranged from a "true interest" cost of 2.05% to 2.19 %. "True interest" is a measure used to compare on an "apples to apples" basis multiple bids that contain different coupon rates, bond premiums and other terms and conditions. The actual interest rate in any given year may be different from the true interest, which is the average annual interest cost to the Town over the life of the bond. The successful bidder was Roosevelt and Cross with a true interest bid of 2.05 %, which includes a premium of $169,000. The coupon rate is front - end- loaded, as high as 4% or so in earlier years but lower in later years. The bonds were sold on February 16 and have maturities ranging from five to ten years. Bonds issued at this time last year were sold at a true interest cost of about 1.5 %. Interest rates are starting to trend upward due to unease in the markets about municipal finances generally, but with its Aaa rating, Lexington will do much better than most other communities. The Town also issued a bond anticipation note (BAN) in the amount of $1,297,400 for the purpose of making a progress payment on the acquisition of the Cotton Farm Property. There were 5 bids, the lowest of which was from Century Bank for .7 %, with the note due 7/1/11. There will be a request at the upcoming Annual Town Meeting to appropriate -1-