MARBLEHEAD — Marblehead’s Select Board unanimously approved a $24.975 million bond issue Wednesday, authorizing long-term borrowing to finance seven previously approved capital projects, including road improvements, school repairs, and municipal building upgrades.
Acting Chair Alexa Singer led the meeting while Chair Dan Fox participated remotely, with the board voting unanimously after hearing a financing presentation from Treasurer Cami Iannarelli, who delivered remarks prepared by Finance Director Aleesha Benjamin.
“On April 16, Marblehead successfully went to market with a general obligation bond issue totaling $24,975,000,” Iannarelli read from Benjamin’s statement. “The town received 10 competitive bids, reflecting strong investor confidence and a healthy market for municipal bonds.”
Oppenheimer & Co. submitted the winning bid at a true interest cost of 3.752%, according to the presentation.
Iannarelli said the bond sale produced what she described as a “standout result:” approximately $1.5 million in bond premium.
“This premium fully covered the cost of issuance, and allowed the town to reduce the amount needed to borrow down from $26.2 million to $24.975 million,” Iannarelli said, adding it was “saving taxpayers money before the first payment is even made.”
The projects being funded with the bond are: Roads and sidewalks $9,098,250, High school roof and HVAC $8,441,500, Mary Alley HVAC and ADA improvements $5,637,450, Abbot Public Library renovations $941,050, Mary Alley Building roof replacement $451,550, Franklin Street Fire Station roof and gutter replacement, $123,450 and Information technology equipment and software at $281,750.
She said the bonds carry a true interest cost of 3.752%, which Benjamin characterized as a “strong outcome” under current economic conditions. With inflation running near 3.3% and the Federal Reserve’s long-term 30-year inflation expectation at 2.47%, Benjamin said locking in a sub-4% borrowing rate places the town within roughly 1.5 percentage points of projected long-term inflation, producing what she called “meaningful savings” to taxpayers over the life of the projects.
Iannarelli said Marblehead’s outstanding debt stood at $90.16 million and will rise to approximately $115,133,575 with the new bond issue.
Iannarelli told board members the town’s outstanding debt will rise with the issuance. Also, Marblehead’s recent AAA bond rating from S&P Global Ratings is a factor supporting rates. S&P Global Ratings, this month, revised the outlook from negative to stable. There is a chance that the rating could be lowered if the town continues to draw down reserves over the next few years.
She said the $24.975 million bond carries a total projected interest cost of $15,366,972 through final maturity in 2056. Annual debt service on the new issue is expected to average about $1.86 million per year through fiscal 2041, reflecting what officials described as the roughly 15-year average life of most funded projects.
According to the presentation, debt service “drops materially after that” as shorter-lived projects retire, with only the high school roof project and Mary Alley HVAC and ADA improvements carrying obligations through 2056.
Iannarelli also outlined the maturity schedule, saying the largest maturity — $17 million — comes due in 2035, with the remaining balance spread across 2046, 2049, 2053, and 2056.
The bond vote came amid broader discussion of long-term capital needs across town buildings. During a later presentation on municipal facilities, members pointed to the scope of maintaining more than 20 town-owned properties and the challenge of addressing deferred maintenance.
“There’s a significant number of buildings that we have to find the resources to care for,” Singer said during that discussion.
Singer said the overview underscored the need for continued investment.
“It’s very clear that we do need a general buildings department and something for maintenance,” Fox said during the discussion of future capital needs.
He said the bond-funded projects are separate from current override discussions and reflect investments voters had already approved.
