Legal Documents of Pittman Center

Code of Pittman Center

Table of Contents » Title 5 Municipal Finance and Taxation » Chapter 5 Debt Policy » § 5-510 Refinancing outstanding debt.
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Title 5
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Title 5, Chapter 1
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§ 5-101
Pittman Center
Title 5 : Municipal Finance and Taxation
Chapter 5 : Debt Policy

5-510 : Refinancing outstanding debt.

  1. The town will refund debt when it is in the best financial interest of the town to do so, and the chief financial officer shall have the responsibility to analyze outstanding bond issues for refunding opportunities. The comptroller's office must review the refunding plan prior to the decision being approved by the governing body, and all plans for current or advance refunding (no longer tax-exempt) of debt must be in compliance with state laws and regulations.
  2. The chief financial officer will consider the following issues when analyzing possible refunding opportunities:
    1. Onerous restrictions - Debt may be refinanced to eliminate onerous or restrictive covenants contained in existing debt documents, or to take advantage of changing financial conditions or interest rates.
    2. Restructuring for economic purposes - The town will refund debt when it is in the best financial interest of the town to do so. Such refunding may include restructuring to meet unanticipated revenue expectations achieve cost savings, mitigate irregular debt service payments, or to release reserve funds. Current refunding opportunities may be considered by the chief financial officer if the refunding generates positive present value savings, and the chief financial officer must establish a minimum present value savings threshold for any refinancing.
    3. Term of refunding issues - The town will refund bonds within the term of the originally issued debt. However, the chief financial officer may consider maturity extension, when necessary to achieve a desired outcome, provided such extension is legally permissible. The chief financial officer may also consider shortening the term of the originally issued debt to realize greater savings. The remaining useful life of the financed facility and the concept of inter-generational equity should guide this decision.
    4. Escrow structuring - The town shall utilize the least costly securities available in structuring refunding escrows. Under no circumstances shall an underwriter, agent or financial advisor sell escrow securities to the town from its own account.
    5. Arbitrage - The town shall consult with persons familiar with the arbitrage rules to determine applicability, legal responsibility, and potential consequences associated with any refunding. (Ord. #241, June 2012, as replaced by Ord. #329, Jan. 2024 Ch2_01-18-24)