The Longmeadow Select Board unanimously approves short-term borrowing for town projects.
Photo credit: LongmeadowTV
LONGMEADOW — The Longmeadow Select Board made its first set of votes with new positions after approving over $70 million in short-term borrowing for four town projects through bond anticipation notes.
The yearly Select Board reorganization kicked off the June 15 meeting with Chair Josh Levine nominating Select Board member Dan Zwirko to take on the role. Zwirko is entering his fifth year with the Select Board and Levine said he thinks the position will be a great fit for him.
Zwirko said “it’s been an honor to serve the community I grew up in” before being unanimously voted in as the new Select Board chair.
“I love Longmeadow and I think we all do as well,” Zwirko said. “We want to make sure that we continue to make Longmeadow a great place to work, live, raise a family and it’s quite an honor to be on this board.”
Town Treasurer Erica Brunell and Finance Director Ian Coddington were also present at the meeting to answer questions on the bond anticipation notes before the vote.
BANs are short-term debt that municipalities can use to fund projects before rolling into long-term borrowing. The four projects under the BAN are the middle school construction at $60 million, $8 million for water main improvements, $1.92 million for sewer improvements and $1.5 million for water meters.
The town went out to bid for the $71,464,601 BAN and received five bids back on June 9, accepting BNY Mellon Capital Markets, LLC’s bid with a one-year borrowing, 4% interest rate, net interest cost of 2.71% and a $914,782 premium.
Select Board member Andrew Lam said he is more comfortable with the BAN after discussing it with Coddington. He said it gets the town to a point where it can the borrowing later, but that it’s important to acknowledge that the borrowing comes with some risk.
“We’re basically just paying interest on this and there’s no principle being paid,” Lam said. “It might work out in our favor, especially if interest rates go down when we make the major borrowing, but it’s also possible it could go the other way.”
Coddington said that financing traditionally comes first in the form of short-term borrowing during the construction phase of large projects.
“When we had [Longmeadow High School], when we had the DPW building, we did a similar thing,” Coddington said. “We borrowed short-term during the phase of construction and then ultimately borrowed within a long-term borrowing once construction was substantially complete. Nothing has changed here. [Lam] is correct that we do have some interest rate risk.
Coddington added that the financial advisors monitor rates throughout the entire process and that every long-term project has the ability to issue refinancing, which the town took advantage of for the high school.
“[Refinancing] saved us a pretty penny,” Coddington said. “It is something that ultimately does have risk in the short-term, and also the long-term, but it’s something that is monitored.”
The Select Board unanimously approved six motions and expects the funds by June 22. The total amount back will be paid back with any accrued interest and the premium on June 22, 2027.
Residents can view the financial spreadsheets for the borrowing and read the exact votes in the Select Board’s June 15 agenda at longmeadowma.gov/AgendaCenter/Select-Board-8.
