Waterford — The town of Waterford decided to go ahead with refunding its $15,640,000 in General Obligation Bonds at its recent Representative Town Meeting.

General obligation bonds are municipal bonds. Towns lean on credit and taxing power to pay for them. This $15 million-plus was bonded in 2012 to help pay for additions to and renovations of Great Neck Elementary School.

Town Finance Director Kevin McNabola and Town Attorney Robert Avena made the presentation to the RTM, urging it to back the refunding package because, "Based on current market conditions and interest rates, it's a good time within the market to execute a refunding, which will generate significant savings for the town of Waterford in the coming fiscal years," McNabola said.

According to McNabola, the bottom line for Waterford taxpayers is that refunding these bonds will save the town $527,993 through 2031.

"The cost savings over 11 years will lower the overall debt service budget for the operating budget, which in turn would provide a lower number within the overall general fund budget, which is currently $95,267,503," McNabola said, "so the budget would be lowered each year for the next 11 years, basically requiring less money from the taxpayers to fund the budget."

Investopedia defines debt service as money that "is required to cover the repayment of interest and principal on a debt for a particular period."

Waterford's last refunding of general obligation bonds was in 2017. 

McNabola estimates that the new debt service on these bonds based on the refunding will be $11,819,443, versus the prior debt service of $12,347,437, which would have been a greater expense to taxpayers.

Even though he voted in favor, Democrat Ted Olynciw of the second district was the only representative with serious opposition to the measure. He felt it gave too much power to the town's first selectman and finance director to handle the bonds.

"I'm just confused because there doesn't seem to be checks and balances on bonds," Olynciw said. "You've got two people determining what's best for the town, everything else we do goes through various boards and commissions."

Olynciw took issue with, in part, this section and similar sections of the resolution: "the first selectman and the director of finance are authorized to make representations and enter into written agreements for the benefit of holders of the bonds to provide secondary market disclosure information, which agreements may include such terms as they deem advisable or appropriate in order to comply with applicable laws or rules pertaining to the sale or purpose of such bonds."

McNabola and Avena alleviated Olynciw's concerns by saying the Board of Finance and Board of Selectmen had been made aware of the bond refunding, and the RTM had the final call on whether to move forward with it.

The scheduled closing date on the refunding is Dec. 30.

s.spinella@theday.com