First Selectwoman Lynne Vanderslice (top) holds up a bonding resolution discussed by Wilton CFO Dawn Norton (left) and financial consultant Barry Bernabe at a special meeting of the Board of Selectmen. Credit: Town of Wilton Zoom recording (May 8, 2023), PicCollage

The FY2024 budget was just approved on May 6, but Wilton’s Board of Selectmen (BOS) is still at work trying to find ways to save the Town some money.

The board held a special meeting yesterday afternoon (May 8) to discuss a resolution that would allow the refunding of millions of dollars in general obligation bonds previously issued by the Town.

“Refunding” is a method for Wilton to refinance outstanding bonds by issuing new bonds, with the goal of reducing debt service costs.

Before voting on the resolution that would allow refunding up to $26 million from bond issues in 2014, 2015 and 2018, Wilton’s Chief Financial Officer Dawn Norton and bond consultant Barry Bernabe briefed the selectmen on the refunding details.

“The urgency of having this resolution approved by the board is so that it gives Barry the ability to monitor the market and should the rates be on our favor, we can, by refunding, realize a great deal of savings,” Norton told the selectmen.

Norton alluded to some earlier calculations that showed a refunding for Wilton’s bond issues could potentially result in about $900,000 in budgetary savings. Some of those bonds were issued at interest rates up to 4%.

The resolution would remain in effect until April 30, 2024, enabling the Town to act opportunistically.

“That does give us a lot of time in order to watch the market and grab a good refunding if one happens to come by,” Norton said.

Bernabe agreed with Norton’s assessment.

“I think it’s in the Town’s best interest to authorize the [resolution]. It doesn’t mean we’re going to issue the refunding bonds, but if the town approves the refunding resolution… it allows the town the flexibility to move quickly if the market is favorable to lock in significant savings,” he said.

Bernabe noted that the $13.1 million “new money” bond issue already scheduled for later this month would provide a good indication of market conditions.

Because Wilton has an up-to-date prospectus and a recently reaffirmed Aaa bond rating from Moody’s, Bernabe said turnaround time on a refunding could be quite efficient. Still, he cautioned that many market factors remain somewhat volatile and uncertain.

“Again, the whole thing with this refunding [resolution] is just providing the town flexibility to move quickly if the market is favorable,” Bernabe reiterated.

Bernabe said industry standards suggest that refunding is worthwhile when net present value savings of at least 2% (after issuance costs) can be achieved.

He also confirmed that refunding does not change the maturity date for the bonds; the refunded debt is not outstanding any longer than the original issue.

The selectmen voted unanimously to adopt the resolution, which has been posted on the Town website.