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October 2016
  • Two members from the Debt Policy Task Team, Bob Cenci (D-6) and Jeff Bardos (D-5) presented an update to the Working Group White Paper that was presented in April (7-5-0). The update incorporates recent information from the Town’s long term capital plan and now includes objective borrowing controls, “affordable standards”, not present in the original White Paper.

    Fundamentally, the White Paper proposed that Greenwich adopt borrowing policies similar to those used by other AAA rated communities in Fairfield County, that insure that each citizen who uses a financed asset, pay their fair share of its cost, over its “useful life”. (Recognizing that the State limits of 20-years maximum.) This is unlike the Town’s current policy of paying for all public assets with 5-year bonds and other shorter term instruments which results in high debt service levels for the Town. (See the updated White Paper below)

    There appeared to be general agreement by the Committee that the proposed “useful life” borrowing terms would not only be more fair for its citizens than the Town’s current short term borrowing policy, (limiting bonds to 5-year terms) and the resulting high debt service levels, is actually more expensive for the Town.

    However, while many Committee members recognized the benefits of approving the White Paper and accompanying SOMR, equally they were concerned that there was no mechanism yet proposed for ensuring that the Town would realize the significant near term “savings” resulting from longer-term borrowing and that budget discipline could be eroded.

    Both sides expressed a willingness to suggest language that might help define how they’d like to see savings applied and/or tallied and the authors agreed to work on it further.

    Two members from the Debt Policy Task Team, Bob Cenci (D-6) and Jeff Bardos (D-5) presented an update to the Working Group White Paper that was presented in April (7-5-0). The update incorporates recent information from the Town’s long term capital plan and now includes objective borrowing controls, “affordable standards”, not present in the original White Paper.

    Fundamentally, the White Paper proposed that Greenwich adopt borrowing policies similar to those used by other AAA rated communities in Fairfield County, that insure that each citizen who uses a financed asset, pay their fair share of its cost, over its “useful life”. (Recognizing that the State limits of 20-years maximum.) This is unlike the Town’s current policy of paying for all public assets with 5-year bonds and other shorter term instruments which results in high debt service levels for the Town. (See the updated White Paper below)

    There appeared to be general agreement by the Committee that the proposed “useful life” borrowing terms would not only be more fair for its citizens than the Town’s current short term borrowing policy, (limiting bonds to 5-year terms) and the resulting high debt service levels, is actually more expensive for the Town.

    However, while many Committee members recognized the benefits of approving the White Paper and accompanying SOMR, equally they were concerned that there was no mechanism yet proposed for ensuring that the Town would realize the significant near term “savings” resulting from longer-term borrowing and that budget discipline could be eroded.

    Both sides expressed a willingness to suggest language that might help define how they’d like to see savings applied and/or tallied and the authors agreed to work on it further.

    Two members from the Debt Policy Task Team, Bob Cenci (D-6) and Jeff Bardos (D-5) presented an update to the Working Group White Paper that was presented in April (7-5-0). The update incorporates recent information from the Town’s long term capital plan and now includes objective borrowing controls, “affordable standards”, not present in the original White Paper.

    Fundamentally, the White Paper proposed that Greenwich adopt borrowing policies similar to those used by other AAA rated communities in Fairfield County, that insure that each citizen who uses a financed asset, pay their fair share of its cost, over its “useful life”. (Recognizing that the State limits of 20-years maximum.) This is unlike the Town’s current policy of paying for all public assets with 5-year bonds and other shorter term instruments which results in high debt service levels for the Town. (See the updated White Paper below)

    There appeared to be general agreement by the Committee that the proposed “useful life” borrowing terms would not only be more fair for its citizens than the Town’s current short term borrowing policy, (limiting bonds to 5-year terms) and the resulting high debt service levels, is actually more expensive for the Town.

    However, while many Committee members recognized the benefits of approving the White Paper and accompanying SOMR, equally they were concerned that there was no mechanism yet proposed for ensuring that the Town would realize the significant near term “savings” resulting from longer-term borrowing and that budget discipline could be eroded.

    Both sides expressed a willingness to suggest language that might help define how they’d like to see savings applied and/or tallied and the authors agreed to work on it further.

    Two members from the Debt Policy Task Team, Bob Cenci (D-6) and Jeff Bardos (D-5) presented an update to the Working Group White Paper that was presented in April (7-5-0). The update incorporates recent information from the Town’s long term capital plan and now includes objective borrowing controls, “affordable standards”, not present in the original White Paper.

    Fundamentally, the White Paper proposed that Greenwich adopt borrowing policies similar to those used by other AAA rated communities in Fairfield County, that insure that each citizen who uses a financed asset, pay their fair share of its cost, over its “useful life”. (Recognizing that the State limits of 20-years maximum.) This is unlike the Town’s current policy of paying for all public assets with 5-year bonds and other shorter term instruments which results in high debt service levels for the Town. (See the updated White Paper below)

    There appeared to be general agreement by the Committee that the proposed “useful life” borrowing terms would not only be more fair for its citizens than the Town’s current short term borrowing policy, (limiting bonds to 5-year terms) and the resulting high debt service levels, is actually more expensive for the Town.

    However, while many Committee members recognized the benefits of approving the White Paper and accompanying SOMR, equally they were concerned that there was no mechanism yet proposed for ensuring that the Town would realize the significant near term “savings” resulting from longer-term borrowing and that budget discipline could be eroded.

    Both sides expressed a willingness to suggest language that might help define how they’d like to see savings applied and/or tallied and the authors agreed to work on it further.

    i
    (October 10, 2016)
    Task Team Assignments

    Department Department Official Assigned Team Members
    Finance Peter Mynarski Jr. Mike Warner
    Assessor Lauren Elliott Grant Perkins, Rob Perelli-Minetti
    Controller Peter Mynarski Jr. Rebecca Steinfeld/Jeff Bardos
    Treasurer Kathleen Murphy Michael Metzger, Jeff Bardos
    Retirement Board John Chadwick John Dolan/
    Tax Department Anthony Laudonia Brian O’Conner
    Budget Department Roland Gieger Tom Egan, Grant Perkins
    Workers Compensation Mary Pepe Mike Warner, Bob Byrnes
    OPEB Peter Mynarski Jr. Rebecca Steinfeld/Barry Rickert/ John Dolan
    Labor Relations Al Cava Rob Perelli-Minetti/Mike Warner/ Bob Byrnes
    Nathaniel Witherell Bob Allen Jackie Hammock/ Barry Rickert
    Borrowing/Bonding Bob Cenci/Jeff Bardos/Tony Turner/ Brian O’Connor
    Top 10 Capital Items _______________________________________

    Updated-Debt Policy White Paper

    This past April, the Finance Committee voted to accept the conclusions of a White Paper prepared by a four-person subcommittee reviewing the current Debt Policy of the BET. At that time, a number of committee members expressed a concern that the White Paper did not directly address nor recommend constraints on the level of outstanding debt which the Town could maintain without jeopardizing its bond ratings or market access. Also, in May, the RTM approved a final fiscal year budget causing revisions to the long term capital plan assumptions which had served as the basis for the financial analysis included in the White Paper.

    We have, therefore, undertaken a revision of the White Paper to accomplish the following:

    • Incorporate the Town's current long term capital plan assumptions in the analysis.
    • Propose meaningful constraints on the incurrence of debt by the Town.
    • Recommend that the Finance Committee approve and promote a Sense of the Meeting Resolution for approval by the RTM consistent with the recommendations of the White Paper.

    Charts 1 and 2 below compare the bonding program results of the Town's current long term capital plan, which relies principally on 5 year bonds, to a bonding program which bases the maturity schedule of its bonds on the useful lives of assets financed by said bonds (herein assumed to be an average of 20 years). Compared to five-year bonding, a financing plan based on the useful lives of the assets financed would lower the annual debt service (ADR) (equal to the sum of annual principal and debt payments) in the early years and increases the ADR in later years of the bond term. The 'useful life' bonding scenario assumes that we invest 50% of the annual debt service "saved" to meet that year's capital costs. This incremental cash investment in capital assets, importantly, reduces the amount of borrowing required in each such year. All other assumptions regarding financing costs, etc. are unchanged from the original White Paper.

    Results

    1) Maximum annual debt service under the current capital financing plan will balloon to $64.7 million in fiscal year 23-24. Maximum annual debt service under the proposed plan maxes out at only $ 32.5 million in fiscal year 28-29.

    2) Resulting debt service requirements in the proposed plan are less variable year to year than in the current plan and, as a result, present a more consistent annual burden, from a budgeting point of view.

    3) Reduced annual debt service requirements of the proposed plan permit an incremental annual cash investment of tax levy proceeds in capital project costs in years 2017 through 2031. If we invest 50% of the reduced annual debt service requirement of the proposed plan (aggregating $132 million from 2017 through 2031) the Town would need to borrow $140 million less than in the current plan to finance all projects in the budget ($323 million borrowed in the revised plan vs. $456 million in the current plan ).

    4) This reduced borrowing requirement has the beneficial effect, despite the longer term of the bonds and higher annual interest costs, of producing roughly the same aggregate debt service costs when compared with the current plan ($ 727 million vs. $730 million). Significantly, however, debt service costs of the proposed plan would be an aggregate of $252 million less from years 2017 through 2031, offset by $248 million more from years 2032 to 2045.

    5) The timing difference of these cash payments would be quite beneficial to the Town. In present value terms, for any discount factor above 0%, the proposed plan is less costly. For example, at a discount factor of 5%, the value of the proposed plan's debt service schedule in comparison to the current plan's proposed debt service schedule would be approximately $90 million, in current dollars.

    6) In addition, recall that we've assumed that an amount equal to 50% of the reduced annual debt service requirement funded by the capital tax levy is utilized for project costs in the proposed plan. This leaves an amount equal to 50% of the capital tax levy otherwise devoted to debt service available for other purposes. During the 15 year duration of the long term capital plan, this amounts to $120 million dollars. This money would be available to the Town for discretionary purposes, including tax reduction, capital investment, pension plan or OPEB funding, or other legitimate purposes, in some combination.

    Debt Constraints

    In turning to the issue of debt constraints, it is important to consider that, absent charter revisions, it is not possible for one administration (i.e. BET) to limit the governing authority of subsequent administrations. However, if soundly constructed limitations on debt issuance are incorporated into BET Debt Policy and widely disseminated, changes in such limitations will attract public scrutiny and require justification as part of annual bond resolution approval discussions at the RTM.

    The current "affordability standards" incorporated in the BET Debt Policy do not meet the standard of 'soundly constructed limitations" since they are not based on evaluation criteria currently used by the bond rating agencies in assessing the appropriateness of the debt policy of municipal borrowers, and hence give little indication of the relative credit standing of the Town vs. other municipal issuers, or the marketability of its bonds to investors.

    It should also be noted that the "affordability standards" employed by the BET have required bi-annual revision. In fact, implementation of the currently proposed capital plan would, in a few short years, result in violation of the "affordability standards" contained in the current Debt Policy, requiring revision by a future BET.

    Moody's Investors Services considers two ratios in its evaluation of the impact of debt on the creditworthiness of municipal general obligation borrowers. Those ratio are:

    • debt to full value of the tax base (equalized grand list), and
    • debt to operating revenues

    We believe the BET should adopt debt to full value and debt to operating revenue ratio constraints at levels which will permit it to finance the long range capital program of the Town while insuring that it maintains the highest AAA bond ratings and access to the broadest public market for its bonds.

    A debt to full value ratio of .75% (assuming a 1% growth in such full value) would be consistent with the bonding requirements of the long term capital plan.

    A debt to operating revenues ratio of 75% (assuming a 4% growth in annual operating revenues) would be consistent with the bonding requirements of the long term capital plan, and serve as a complementary restrain should the level of Town operations remain stable or decrease.

    Importantly, both of these ratios are well within the range acceptable in order for a municipality, comparable to Greenwich in tax base and scope of operations, to maintain its current AAA rating and broadest marketability of its debt. This conclusion is based on an analysis of Moody's municipal bond rating criteria and consultation with the Town's financial advisors.

    Furthermore, we would recommend that the Debt Policy limit outstanding debt of the Town, irrespective of the results of the ratio analysis proposed above, to no more than $375 million during the period covered by the current long term capital plan.

    Conclusion:

    By adopting a financing program for its long range capital plan which incorporates bond repayment schedules which essentially mirror the average useful life of the assets financed, the Town will enjoy the following principal benefits:

    1) an equitable matching of costs of public facilities and their benefits for all citizens, current and future - a generally accepted public policy goal recognized by municipal issuers throughout the country;

    2) a debt service schedule which, when compared to the current financing program, will reduce debt service requirements in years 2017 through 2031, increase cash requirements for years 2031 through 2045, but result in aggregate debt service over the life of the borrowing program which are similar for both plans. Such a result would provide substantial current dollar financial benefits to the Town's taxpayers;

    3) a reduced annual tax levy requirement which could result in significant additional cash resources for the Town during the 15 year horizon of the capital plan;

    4) The opportunity to apply the financial benefits highlighted to:

    • reductions in the level of projected tax increases during the forecast period.
    • additional capital investments.
    • additional investments in capital assets additional contributions to fund pension and OPEB liabilities.

    or some combination of the above.

    Recommendation

    Prepare and offer for consideration and approval by the RTM of a Sense of the Meeting Resolution endorsing the conclusions of the White Paper, as updated.

  • Two members from the Debt Policy Task Team, Bob Cenci (D-6) and Jeff Bardos (D-5) presented an update to the Working Group White Paper that was presented in April (7-5-0). The update incorporates recent information from the Town’s long term capital plan and now includes objective borrowing controls, “affordable standards”, not present in the original White Paper.

    Fundamentally, the White Paper proposed that Greenwich adopt borrowing policies similar to those used by other AAA rated communities in Fairfield County, that insure that each citizen who uses a financed asset, pay their fair share of its cost, over its “useful life”. (Recognizing that the State limits of 20-years maximum.) This is unlike the Town’s current policy of paying for all public assets with 5-year bonds and other shorter term instruments which results in high debt service levels for the Town. (See the updated White Paper below)

    There appeared to be general agreement by the Committee that the proposed “useful life” borrowing terms would not only be more fair for its citizens than the Town’s current short term borrowing policy, (limiting bonds to 5-year terms) and the resulting high debt service levels, is actually more expensive for the Town.

    However, while many Committee members recognized the benefits of approving the White Paper and accompanying SOMR, equally they were concerned that there was no mechanism yet proposed for ensuring that the Town would realize the significant near term “savings” resulting from longer-term borrowing and that budget discipline could be eroded.

    Both sides expressed a willingness to suggest language that might help define how they’d like to see savings applied and/or tallied and the authors agreed to work on it further.

    Two members from the Debt Policy Task Team, Bob Cenci (D-6) and Jeff Bardos (D-5) presented an update to the Working Group White Paper that was presented in April (7-5-0). The update incorporates recent information from the Town’s long term capital plan and now includes objective borrowing controls, “affordable standards”, not present in the original White Paper.

    Fundamentally, the White Paper proposed that Greenwich adopt borrowing policies similar to those used by other AAA rated communities in Fairfield County, that insure that each citizen who uses a financed asset, pay their fair share of its cost, over its “useful life”. (Recognizing that the State limits of 20-years maximum.) This is unlike the Town’s current policy of paying for all public assets with 5-year bonds and other shorter term instruments which results in high debt service levels for the Town. (See the updated White Paper below)

    There appeared to be general agreement by the Committee that the proposed “useful life” borrowing terms would not only be more fair for its citizens than the Town’s current short term borrowing policy, (limiting bonds to 5-year terms) and the resulting high debt service levels, is actually more expensive for the Town.

    However, while many Committee members recognized the benefits of approving the White Paper and accompanying SOMR, equally they were concerned that there was no mechanism yet proposed for ensuring that the Town would realize the significant near term “savings” resulting from longer-term borrowing and that budget discipline could be eroded.

    Both sides expressed a willingness to suggest language that might help define how they’d like to see savings applied and/or tallied and the authors agreed to work on it further.

    Two members from the Debt Policy Task Team, Bob Cenci (D-6) and Jeff Bardos (D-5) presented an update to the Working Group White Paper that was presented in April (7-5-0). The update incorporates recent information from the Town’s long term capital plan and now includes objective borrowing controls, “affordable standards”, not present in the original White Paper.

    Fundamentally, the White Paper proposed that Greenwich adopt borrowing policies similar to those used by other AAA rated communities in Fairfield County, that insure that each citizen who uses a financed asset, pay their fair share of its cost, over its “useful life”. (Recognizing that the State limits of 20-years maximum.) This is unlike the Town’s current policy of paying for all public assets with 5-year bonds and other shorter term instruments which results in high debt service levels for the Town. (See the updated White Paper below)

    There appeared to be general agreement by the Committee that the proposed “useful life” borrowing terms would not only be more fair for its citizens than the Town’s current short term borrowing policy, (limiting bonds to 5-year terms) and the resulting high debt service levels, is actually more expensive for the Town.

    However, while many Committee members recognized the benefits of approving the White Paper and accompanying SOMR, equally they were concerned that there was no mechanism yet proposed for ensuring that the Town would realize the significant near term “savings” resulting from longer-term borrowing and that budget discipline could be eroded.

    Both sides expressed a willingness to suggest language that might help define how they’d like to see savings applied and/or tallied and the authors agreed to work on it further.

    Two members from the Debt Policy Task Team, Bob Cenci (D-6) and Jeff Bardos (D-5) presented an update to the Working Group White Paper that was presented in April (7-5-0). The update incorporates recent information from the Town’s long term capital plan and now includes objective borrowing controls, “affordable standards”, not present in the original White Paper.

    Fundamentally, the White Paper proposed that Greenwich adopt borrowing policies similar to those used by other AAA rated communities in Fairfield County, that insure that each citizen who uses a financed asset, pay their fair share of its cost, over its “useful life”. (Recognizing that the State limits of 20-years maximum.) This is unlike the Town’s current policy of paying for all public assets with 5-year bonds and other shorter term instruments which results in high debt service levels for the Town. (See the updated White Paper below)

    There appeared to be general agreement by the Committee that the proposed “useful life” borrowing terms would not only be more fair for its citizens than the Town’s current short term borrowing policy, (limiting bonds to 5-year terms) and the resulting high debt service levels, is actually more expensive for the Town.

    However, while many Committee members recognized the benefits of approving the White Paper and accompanying SOMR, equally they were concerned that there was no mechanism yet proposed for ensuring that the Town would realize the significant near term “savings” resulting from longer-term borrowing and that budget discipline could be eroded.

    Both sides expressed a willingness to suggest language that might help define how they’d like to see savings applied and/or tallied and the authors agreed to work on it further.

    i
    (October 10, 2016)
    Task Team Assignments

    Department Department Official Assigned Team Members
    Finance Peter Mynarski Jr. Mike Warner
    Assessor Lauren Elliott Grant Perkins, Rob Perelli-Minetti
    Controller Peter Mynarski Jr. Rebecca Steinfeld/Jeff Bardos
    Treasurer Kathleen Murphy Michael Metzger, Jeff Bardos
    Retirement Board John Chadwick John Dolan/
    Tax Department Anthony Laudonia Brian O’Conner
    Budget Department Roland Gieger Tom Egan, Grant Perkins
    Workers Compensation Mary Pepe Mike Warner, Bob Byrnes
    OPEB Peter Mynarski Jr. Rebecca Steinfeld/Barry Rickert/ John Dolan
    Labor Relations Al Cava Rob Perelli-Minetti/Mike Warner/ Bob Byrnes
    Nathaniel Witherell Bob Allen Jackie Hammock/ Barry Rickert
    Borrowing/Bonding Bob Cenci/Jeff Bardos/Tony Turner/ Brian O’Connor
    Top 10 Capital Items _______________________________________

    Updated-Debt Policy White Paper

    This past April, the Finance Committee voted to accept the conclusions of a White Paper prepared by a four-person subcommittee reviewing the current Debt Policy of the BET. At that time, a number of committee members expressed a concern that the White Paper did not directly address nor recommend constraints on the level of outstanding debt which the Town could maintain without jeopardizing its bond ratings or market access. Also, in May, the RTM approved a final fiscal year budget causing revisions to the long term capital plan assumptions which had served as the basis for the financial analysis included in the White Paper.

    We have, therefore, undertaken a revision of the White Paper to accomplish the following:

    • Incorporate the Town's current long term capital plan assumptions in the analysis.
    • Propose meaningful constraints on the incurrence of debt by the Town.
    • Recommend that the Finance Committee approve and promote a Sense of the Meeting Resolution for approval by the RTM consistent with the recommendations of the White Paper.

    Charts 1 and 2 below compare the bonding program results of the Town's current long term capital plan, which relies principally on 5 year bonds, to a bonding program which bases the maturity schedule of its bonds on the useful lives of assets financed by said bonds (herein assumed to be an average of 20 years). Compared to five-year bonding, a financing plan based on the useful lives of the assets financed would lower the annual debt service (ADR) (equal to the sum of annual principal and debt payments) in the early years and increases the ADR in later years of the bond term. The 'useful life' bonding scenario assumes that we invest 50% of the annual debt service "saved" to meet that year's capital costs. This incremental cash investment in capital assets, importantly, reduces the amount of borrowing required in each such year. All other assumptions regarding financing costs, etc. are unchanged from the original White Paper.

    Results

    1) Maximum annual debt service under the current capital financing plan will balloon to $64.7 million in fiscal year 23-24. Maximum annual debt service under the proposed plan maxes out at only $ 32.5 million in fiscal year 28-29.

    2) Resulting debt service requirements in the proposed plan are less variable year to year than in the current plan and, as a result, present a more consistent annual burden, from a budgeting point of view.

    3) Reduced annual debt service requirements of the proposed plan permit an incremental annual cash investment of tax levy proceeds in capital project costs in years 2017 through 2031. If we invest 50% of the reduced annual debt service requirement of the proposed plan (aggregating $132 million from 2017 through 2031) the Town would need to borrow $140 million less than in the current plan to finance all projects in the budget ($323 million borrowed in the revised plan vs. $456 million in the current plan ).

    4) This reduced borrowing requirement has the beneficial effect, despite the longer term of the bonds and higher annual interest costs, of producing roughly the same aggregate debt service costs when compared with the current plan ($ 727 million vs. $730 million). Significantly, however, debt service costs of the proposed plan would be an aggregate of $252 million less from years 2017 through 2031, offset by $248 million more from years 2032 to 2045.

    5) The timing difference of these cash payments would be quite beneficial to the Town. In present value terms, for any discount factor above 0%, the proposed plan is less costly. For example, at a discount factor of 5%, the value of the proposed plan's debt service schedule in comparison to the current plan's proposed debt service schedule would be approximately $90 million, in current dollars.

    6) In addition, recall that we've assumed that an amount equal to 50% of the reduced annual debt service requirement funded by the capital tax levy is utilized for project costs in the proposed plan. This leaves an amount equal to 50% of the capital tax levy otherwise devoted to debt service available for other purposes. During the 15 year duration of the long term capital plan, this amounts to $120 million dollars. This money would be available to the Town for discretionary purposes, including tax reduction, capital investment, pension plan or OPEB funding, or other legitimate purposes, in some combination.

    Debt Constraints

    In turning to the issue of debt constraints, it is important to consider that, absent charter revisions, it is not possible for one administration (i.e. BET) to limit the governing authority of subsequent administrations. However, if soundly constructed limitations on debt issuance are incorporated into BET Debt Policy and widely disseminated, changes in such limitations will attract public scrutiny and require justification as part of annual bond resolution approval discussions at the RTM.

    The current "affordability standards" incorporated in the BET Debt Policy do not meet the standard of 'soundly constructed limitations" since they are not based on evaluation criteria currently used by the bond rating agencies in assessing the appropriateness of the debt policy of municipal borrowers, and hence give little indication of the relative credit standing of the Town vs. other municipal issuers, or the marketability of its bonds to investors.

    It should also be noted that the "affordability standards" employed by the BET have required bi-annual revision. In fact, implementation of the currently proposed capital plan would, in a few short years, result in violation of the "affordability standards" contained in the current Debt Policy, requiring revision by a future BET.

    Moody's Investors Services considers two ratios in its evaluation of the impact of debt on the creditworthiness of municipal general obligation borrowers. Those ratio are:

    • debt to full value of the tax base (equalized grand list), and
    • debt to operating revenues

    We believe the BET should adopt debt to full value and debt to operating revenue ratio constraints at levels which will permit it to finance the long range capital program of the Town while insuring that it maintains the highest AAA bond ratings and access to the broadest public market for its bonds.

    A debt to full value ratio of .75% (assuming a 1% growth in such full value) would be consistent with the bonding requirements of the long term capital plan.

    A debt to operating revenues ratio of 75% (assuming a 4% growth in annual operating revenues) would be consistent with the bonding requirements of the long term capital plan, and serve as a complementary restrain should the level of Town operations remain stable or decrease.

    Importantly, both of these ratios are well within the range acceptable in order for a municipality, comparable to Greenwich in tax base and scope of operations, to maintain its current AAA rating and broadest marketability of its debt. This conclusion is based on an analysis of Moody's municipal bond rating criteria and consultation with the Town's financial advisors.

    Furthermore, we would recommend that the Debt Policy limit outstanding debt of the Town, irrespective of the results of the ratio analysis proposed above, to no more than $375 million during the period covered by the current long term capital plan.

    Conclusion:

    By adopting a financing program for its long range capital plan which incorporates bond repayment schedules which essentially mirror the average useful life of the assets financed, the Town will enjoy the following principal benefits:

    1) an equitable matching of costs of public facilities and their benefits for all citizens, current and future - a generally accepted public policy goal recognized by municipal issuers throughout the country;

    2) a debt service schedule which, when compared to the current financing program, will reduce debt service requirements in years 2017 through 2031, increase cash requirements for years 2031 through 2045, but result in aggregate debt service over the life of the borrowing program which are similar for both plans. Such a result would provide substantial current dollar financial benefits to the Town's taxpayers;

    3) a reduced annual tax levy requirement which could result in significant additional cash resources for the Town during the 15 year horizon of the capital plan;

    4) The opportunity to apply the financial benefits highlighted to:

    • reductions in the level of projected tax increases during the forecast period.
    • additional capital investments.
    • additional investments in capital assets additional contributions to fund pension and OPEB liabilities.

    or some combination of the above.

    Recommendation

    Prepare and offer for consideration and approval by the RTM of a Sense of the Meeting Resolution endorsing the conclusions of the White Paper, as updated.

  • SENT VIA RTM WEBSITE; UNABLE TO RESPOND DIRECTLY

    TO: ALL RTM MEMBERS
    FROM: Lucia D. Jansen, Chairman, Budget Overview Committee (BOC)
    DATE: October 13, 2016
    RE: BOC Motion to Postpone Item #5 on the Call

    BOC Motion to Postpone Item #5 as it appears on the October 24, 2016 Call

    Item #5 entails the Greenwich Municipal Employees Association (GMEA) collective bargaining agreement contract, which is a 3 year, $112 million contract that covers over 244 Town of Greenwich employees.