Project Bond Update
At the February 27th SBC meeting, Jim Hutchinson, Chair of the Finance Committee, provided information about the recently issued bond for the project, and shared analysis of the impact on residential tax bills.
On February 15th, the Town’s “AAA Stable” bond rating was reconfirmed by Standard & Poors. This was excellent news for Lincoln, and reflects the decades of hard work and sound financial policy practiced by our professional and volunteer financial team. With the best possible rating in hand, an initial $80M bond was put out to bid and eight offers were received. Citibank Global Markets offered the lowest interest rate, an average of 3.38% over the 30 year life of the bond, which is significantly lower than the percentage rates used in the tax impact models shown at the December 1st Town Meeting. Following are two ways of looking at the tax impact:
The table below shows the projected tax impact on different house values for FY20. It takes into account the proposed FY20 Budget (on which we will vote at the March 23rd Town Meeting).
The graph compares the impact of the current scenario ($80M just borrowed @ 3.38% + an expected $8.5M bond @ 4% in 2021) to two prior estimates on a calendar year basis. For the current scenario only (light green bar), the graph includes the impact of the proposed FY20 budget.
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