Windham restructures bonds to save town $45,000

By Ed Pierce

Acting upon advice from a bonding agent, members of the Windham Town Council have voted unanimously to restructure some existing bonds which will save the town $45,000 by the time the bonds are eventually paid off.

The Windham Town Council has voted to restructure a
general obligation bond from 2003 to realize savings of
$45,000 for the town. PHOTO BY KEITH MANK

During a Windham Town Council meeting on Jan. 10, councilors were briefed by Windham Town Manager Barry Tibbetts about the potential for significant savings under a proposed bond restructuring plan.

The original bond of $36,333 million was approved by town councilors in 2003 and was used to pay construction costs for a new addition and renovation project at Windham High School. That general obligation bond was refinanced by the town in 2011 for the purpose of realizing debt service savings to the town at that time.

“When we were going through our current bond approvals, our bonding agent looked at it and we have just two payments left on that bond,” Tibbetts said. “But in refinancing it now, the net effect to us is that we can save $45,000 on this bond.”

The refinanced bond amounts to a total of $3,025 million, according to Moors & Cabot, Inc., the town’s municipal advisor for the issuance of the bond, and an investor has been secured for the restructured bonds.

Municipal bonds are a type of debt security issued by local, county, and state governments. They are commonly offered to pay for capital expenditures such as highway construction or for bridges, or schools. The bonds act like loans, with bondholders becoming creditors of the municipality.

In exchange for the borrowed capital, bondholders and investors are promised interest on the principal balance by being repaid by the municipality by the time of the bond’s maturity date. The bonds are often exempt from most federal and state taxes, which makes them attractive as an investment to those in higher income tax brackets.

Types of municipal bonds include general government obligation and revenue bonds. In Windham’s

case, these specific general obligation bonds were issued by a governmental entity and were not backed by revenue from a specific project, such as from a toll road. Some of Windham’s general obligation bonds are backed by dedicated property taxes, while others are payable from the town’s general funds.

Typically, the interest rate of most municipal bonds is paid at a fixed rate and this rate doesn't change over the life of the bond. However, the underlying price of a particular bond will fluctuate in the secondary market due to market conditions and changes in interest rates and interest rate expectations are generally the primary factors involved in municipal bond secondary market prices.

When interest rates fall, newly issued bonds will pay a lower yield than existing issues, which makes the older bonds more attractive. Investors who want the higher yield may be willing to pay more to get it, and a town such as Windham may weigh refinancing a bond to yield savings, such as for this bond.

All bonds must be approved by the Windham Town Council, and some are voted upon by residents during Windham’s Annual Town Meeting every June.

Windham previously issued $19,045 million in advance refunding general obligations bonds on Dec. 15, 2011, as authorized by the Windham Town Council to refinance the debt owed on the 2003 bonds.

This is fantastic,” said Windham Town Council Chair Mark Morrison. “If we can save $45,000, it’s a no brainer.”

Following a brief discussion, Windham town councilors voted unanimously to approve restructuring the bonds as proposed by the bonding agent to realize the savings.

The restructured bond is expected to be paid in full by Nov. 1, 2033. <

Forestry group selects area resident as its Northern Regional Director

Williamsburg, Va. – Windham business owner, Rene D. Noel, the owner of Southern Maine Forestry Services, in Windham, has been named as the new Northern Regional Director for the national organization Association of Consulting Foresters of America, Inc.

ACF organization members are independent professionals who manage forests across the United States and they also market forest products for private woodland owners and other associated projects and enterprises.

Rene D. Noel, Jr. of Windham, the owner of Southern Maine
Forrestry Services, has been chosen as the Northern Regional
Director of the national Association of Consulting Forresters of
America, Inc. SUBMITTED PHOTO    

“With more than 30 years of experience, Rene’s expertise in forestry management and his leadership skills are valuable to ACF and the Northern Region,” said Justin M. Miller, president of Green Timber Consulting Foresters, Inc., and president of ACF. 

Noel, a licensed forester and appraiser, founded Southern Maine Forestry Services (SMFS) in 1981 to meet the need for comprehensive land and woodlot management in Maine and surrounding states.  Since that time, the firm has grown to five foresters who have managed more than 100,000 acres for 800 clients.

Before starting his company, Noel worked for the Bureau of Public Lands and the Maine Forest Service. He also managed a landscape nursery in Long Island, N.Y. and started his career with the U.S. Forest Service working as a forest technician based in the Black Hills.

He earned a Bachelor of Science degree in forestry science at the University of Maine in Orono.

During college, he started a small business with another student providing forestry management services to landowners. Services including weeding and thinning, tree pruning and planting, herbicide application, and boundary line maintenance.

“I look forward to contributing to ACF and working in collaboration with Justin and my colleagues who are serving as national ACF directors and officers,” said Noel. 

ACF professionals are excited to have Noel on board as Northern Regional Director of the organization. 

“I’m delighted to work with Rene on ACF’s Executive Committee,” said Shannon McCabe, CAE, Executive Director, ACF. “I look forward to partnering with Rene the rest of the EC to further the association’s mission.”

ACF members help landowners enhance property values, increase the value of timber, produce a more sustainable timber harvest, enhance wildlife habitat, and establish and protect a family’s forest legacy. Because of their vital role in the supply chain, ACF members have been deemed essential workers during COVID-19.

As a condition of membership, every consulting forester must have minimum education and experience levels, complete the Practice of Consulting Forestry course, and most importantly, agree to adhere to the organization’s stringent Code of Ethics.

For more information about ACF, visit www.acf-foresters.org.