Town of Brookline FY21 Program Budget

Non-Departmental l Debt and Interest

DEBT SERVICE
Debt Service is the payment of principal and interest costs for bonds issued by the Town for capital projects. For FY21, the Debt Service budget for the General Fund is $22.4 million, an increase of $3,563,654 (15.9%). Please see Section VII of this Financial Plan for a more detailed description of the Capital Improvement Program (CIP), debt, and debt service.
LONG-TERM DEBT
In accordance with the Select Board's Capital Improvements Program (CIP) financing policies, between 4.5% - 6% of the Town's net operating revenues are allocated to service the debt of the CIP. (The policies, which can be found in the Appendix of this Financial Plan, require that a total of 6% of the prior year's net revenue be dedicated to the CIP, with 4.5% targeted for debt and 1.5% targeted for pay-as-you-go.) The Board's policies were designed to boost the commitment to the CIP in an effort to address the backlog of much needed capital projects. In the last 10 years, more than $300 million in bond authorizations have been voted by Town Meeting. As a result, total outstanding debt is now approximately $473 million, with the General Fund responsible for $462 million. FY21 General Fund long-term debt service is projected to total $22.4 million, an increase of $3,563,654 (18.9%) from FY20. The table on page VII-13 shows debt service for all funds, which totals $23,582,094 million.
BOND ANTICIPATION NOTES
Bond Anticipation Notes (BANs) are temporary borrowings made by the Treasurer in anticipation of a long-term bond issue. If funds for a project are needed quickly, or only a portion of the funds are needed right away, or if a majority of the funds will be reimbursed by another governmental agency, the Treasurer will issue BANs, with the approval of the Select Board. BAN interest costs for FY21 are level-funded at $100,000.
ABATEMENT INTEREST AND REFUNDS
Interest payments, which may be due to a taxpayer as a result of a tax abatement, are paid from this account. Also paid from this account are small refunds due to taxpayers because of overpayments. The budget is level-funded for FY21 at $60,000.