Union-News (Springfield, MA)
Author: RICHARD NADOLSKI
CHESTERFIELD, MA – By next spring the Board of Selectmen are hoping to be issuing $100,000 in tax-free municipal bonds backed by the good faith and trust of the Town of Chesterfield to community-minded investors who know a good deal when they see one.
In what is believed to be the first time in the town’s history, selectmen have decided to become their own issuing authority rather than going through a costly rating and financial disclosure procedure required when handled by private company.
The money is needed to pay off the cost of capping the town’s old landfill and the bonds would be for a 15-year period.
“One thing for sure, you know they’d be genuine,” said Selectman Donald Houghton.
David Kielson, chairman of the board, said he has checked into the legality of the town becoming the issuing authority and found out that it looks to be possible.
“It’s legal,” he said.
The town would be offering the bonds to anyone at a rate of about 7 percent but are particularly targeting residents of the hilltowns who might be interested in investing in the local economy. Kielson said ideally the bonds would be sold in increments of a minimum of $10,000 although it is possible that figure could go down to $5,000.
“The risk is the town would go bankrupt,” said Houghton, quickly adding that the possibility of that happening is remote given the fact that it was incorporated before the nation itself came into being.
Kielson said that the town would be creating a list of prospective investors who would be contacted.
“We’ll have to talk to the snowbirds,” said Kielson, referring to residents who spend their winters in warmer climates during the long hilltown winters. He said the target date for the sale of the bonds is next June 30.
The town would most likely require “some kind of legal counsel” before issuing the bonds but it would be minimal, said Kielson. The bonds would be printed locally and have the “Town of Chesterfield” printed on them.
Fire Chief Winston Bancroft was sitting in the room prompting Houghton to suggest that maybe the bonds would also have the chief’s picture on them as well.
Pictures of Bancroft’s face have been showing up in various unusual places as part of a continuing joke. Goshen firefighters used it to grace a scarecrow they hung on their former firehouse and last week the same picture showed up in an old safe which was unlocked for the first time in 20 years recently prompting a grinning Bancroft to question at last night’s meeting how his picture made it into the safe. Both Kielson and Houghton pleaded innocent to any knowledge.
Because it would issue the bonds on its own, the town would not be required to pay for the costly procedures of having the bonds rated and the town’s finances examined. The town initially sought to sell the bonds conventionally wanting to issue 15-year notes, but that would have proved to be a hard sell because of its rather long term, experts said.