WESTFIELD – Mayor Daniel M. Knapik submitted an order to the City Council Thursday night that will enable the city to participate in the State Qualified Bond program to obtain more competitive bond rates. The City Council referred the order to both its Finance Committee and its Legislative & Ordinance Committee.
The language of the order authorizes the City Treasurer to apply to the Commonwealth of Massachusetts Finance Oversight Board for permission to issue bonds of the city as state qualified bonds within the meaning of Massachusetts General Law Chapter 44.
L&O Chairman Christopher Keefe said the state bond process provides the city with economy of scale.
“It’s a garage sale versus a massive flea market. You get a lot more interest,” Keefe said. “What we get is a better (interest) rate because the state has a much bigger pool (of investors) than we do. It is advantageous to the city.”
City Treasurer Meghan Miller said that language of the order is included in most of the recent bonds.
“The advantage to the city is that we get better interest rates, get more bids which make the process more competitive,” Miller said. “The city can go through the state to sell bonds at the state’s credit rating, so we get lower interest rates.
“The state’s bond rating is just a little bit higher than the city’s,” Miller said.
Miller said that there is also a different process of repaying the bonds issued through the state.
“The payment method is different because the state makes the payment, and then subtracts that amount from the city’s Cherry Sheet (of state aid),” Miller said.
Short-term borrowing, bond anticipation notes issued to initiate projects, are most often converted into long-term state bonds after the project is completed.
The City Council also sent to the L&O a petition of the Westfield Gas & Electric Department to abandon a right of way on the property of Columbia Manufacturing, Inc. located on Cycle Street.
Keefe said the utility has an easement “that it doesn’t want anymore. Only the City Council can declare it surplus and sell the easement, most likely to Columbia so it has clear title to its property.”
