“Debt Authorized – Unissued” is a page in the town’s financial statements that should be more popular.
There you will find the town had, as of Fiscal Year End 2020, $12.45 million of unissued debt for items that had been approved by voters in years past. This is on top of the approximately $12 million outstanding.
Why should this be more popular? Because once the appropriated monies are spent, and that debt is issued, it goes into the current expenses of the town. Until then, it sits there, not costing anyone a dime. I was not able to find a projection of what the town budget would be were this debt to be issued over the next year.
I’m not an expert in municipal finance, but I know a little about bonds. Using some quick analysis, I came up with between $1 million and $1.4 million in additional expense – monies to be raised by taxation – that can be added to the budget at any time. Since this is in line with the already-issued debt cost totals of roughly $975,000 for 2021, $1.275 million for 2022 and the issued and unissued balances are “close enough for government work,” it seemed reasonable to me.
As always with analysis of this type, there are caveats. Shortly after the 2021 fiscal year began, $4.6 million was issued. I made assumptions about principal-repayment rates. There are others, some I’m aware of, and probably some I’m not.
I have not found, a section titled “Projected Budget Assuming Unissued Debt Becomes Issued.” That would be a good thing to have before any budget gets voted on. Next up – how about a five-year projection of how the $6 million pension liability is going to affect us?
Rick Villaume
Peterborough