Town Manager: Town Saves Taxpayers $633,000

Framingham Town Manager Bob Halpin said the the Town of Framingham has completed a highly successful municipal bond sale Wednesday, Dec. 5 that will save Framingham taxpayers a total of $633,220 over the remaining 12 year life of the bonds.

The sale included:

• $29,758,000 20-year Series A bond,
• $5,943,000 Series B refunding bond issue
• $24,809,365 1-year bond anticipation note issue.

“This was a very successful sale and a significant financial savings for the Town. Clearly, the investment community continues to see Framingham as a very sound investment despite a lot of other uncertainty in the market place. This high confidence in Framingham is the result of a lot of hard work in balancing budget, protecting and building financial reserves, and addressing our long range financial pictures. We should all be proud that the result of this effort can be seen in real financial savings of this magnitude”, said Halpin in a press release.

"I also wish to commend our finance team, including Chief Financial Officer Mary Ellen Kelley, Treasurer/Collector Stephen Price, and Town Accountant Richard Howarth for the excellent work they performed in managing this bond sale," said Halpin.

"Good job getting those low rates," said Selectmen Chair Charlie Sistisky.

Prior to the sale, Moody’s Investors Service, a municipal credit rating agency, affirmed the Town’s ‘Aa2’ bond rating. They also assigned a rating of ‘MIG-1’ to the Notes, the highest short-term rating attainable. The rating agency cited the Town’s improved reserve levels and sizeable tax base and wealth characteristics above state and national medians as positive credit factors.

The Town of Framingham's Moody’s Investor Services rating is two steps off from the highest rating available.

 “Our goal is to step up to the next highest rating level of Aa1. We would accomplish this by continuing to fortify the finances of the Town by eliminating the use of Free Cash as a base revenue source in the budget, maintain the Stabilization Fund at the 5%, continue to contribute to unfunded liabilities and limit the growth of expenditures to growth in revenue," said Chief Financial Officer Mary Ellen Kelley in a press release.

The Town received 8 bids on the Series A Bonds, 6 bids on the Series B Bonds and 6 bids on the Notes. The number of bidders confirms another positive credit factor cited by Moody’s: “Framingham has proven access to the competitive municipal bond market.”

UBS Financial Services Inc. was the winning bidder on the Series A Bonds with an average interest rate of 2.097%, Janney Montgomery Scott LLC was the winner on the Series B Bonds with an average interest rate of 1.554% and Eastern Bank was the winning bidder on the Notes with an interest rate of 0.208%.

The Series A Bond proceeds and Notes will be used to finance various municipal purposes, while the Series B Bonds will refinance bonds of the Town originally issued on March 15, 2003, March 15, 2004 and March 1, 2005.

The bids for the Bonds and Notes were accepted at the offices of the Town’s financial advisor, First Southwest Company of Boston.