The Vermont Municipal Bond Bank refinanced debt through two series that it said helped 53 municipalities and school districts save nearly $6 million in future debt service payments.
A $43.7 million sale of 2011 Series 5 bonds helped 26 cities and towns refinance debt through the U.S. Department of Agriculture’s rural development programs. It originally issued the debt to primarily fund municipal water and sewer projects.
The refinancing bonds will save participating municipalities more than $4.1 million, according to the bond bank’s executive director, Robert Giroux.
Through the $25.9 million issue of 2011 Series 6 bonds, the bank was able to refinance its 2003 Series 2 bonds, resulting in $1.75 million in savings for an additional 27 municipalities and school districts. According to Giroux, loans from the 2003 Series 2 bonds were originally used mainly for construction and renovation projects.
Moody’s Investors Service rated the Series 5 and Series 6 bonds, both issued on Dec. 15, Aa2 with a stable outlook, which is two notches below Vermont’s general obligation rating of Aaa, also stable. Moody’s cited an active program management, healthy reserves, and significant state involvement, including the pledge of the state’s moral obligation, as strengths.
Fitch Ratings assigns a AAA rating to the state’s GO bonds, while Standard & Poor’s assigns a AA-plus.
Champlain College on Dec. 9 financed $7.7 million of new debt through the Vermont Educational and Health Buildings Financing Authority, placed privately through TD Bank. The financing will enable the Burlington college to construct a 98-bed, on-campus dormitory.
According to Giroux, who is also the authority’s executive director, increasing its supply of on-campus housing helps the college recruit students and increase retention. Construction costs alone from the dormitory project should add $6.7 million to the local economy.
Giroux said the project’s contractor and subcontractors will employ between 160 and 200 craftsmen, with more than 60% of the dollar value of construction going to Vermont-based subcontractors.
Meanwhile, Gov. Peter Shumlin’s administration has proposed $25.5 million in adjustments to the state’s $4.8 billion general fund spending plan that the Legislature approved in the spring, with Tropical Storm Irene accounting for most of those costs.
Finance commissioner James Reardon said savings, reserve funds, and increased tax revenues could enable the state to cover the extra costs without having to ask for a tax increase or tap into Vermont’s $58 million rainy-day fund, the Burlington Free Press reported.
Administration Secretary Jeb Spaulding said this month that overall, Vermont’s share of Irene-related costs could run from $88 million to just under $100 million. Total costs for Irene, including the federal government’s share, are expected to range from $413 million to $572 million.