A municipality can rarely wait until it has "saved" enough money from surplus revenue to pay for things like roadwork, new fire trucks, or affordable housing obligations. That's why the legislature created the "Local Bond Law", to provide, through Municipal Bonding, a way for local governments to borrow money to pay for these types of projects. Money from bonds cannot be used for day to day expenses. In fact, bond money can only be used for projects or improvements that have a useful life of at least 5 years.
In the past 2 years, the council has taken advantage of favorable interest rates to refinance, at a savings, about $2 million in previously issued bonds, and to provide additional monies for a variety of important projects and improvements. The chart illustrates how the bond money has been allocated.
Although funding for fire and rescue equipment could have been deferred, the long-term expense would have been greater due to the inability to take advantage of available grants. Leveraging the money collected from the dedicated preservation tax to make the payments on a bond means a larger pool of money and the ability to preserve the properties that are a priority to Springfield, even if they are not a priority for the county.
In total, about $5 million (including the $2 million refinance) has been borrowed for these critical projects. The Local Finance Board, the state department responsible for oversight of municipal budgets, has set the debt limit for a municipality at 3 1/2 % of the average equalized valuation. For Springfield, that translates to about $13 million of borrowing power, which means our current debt load is well under 50% of that limit. Because of careful financial planning and fiscal responsibility, Springfield Township enjoys the highest bond rating possible. This rating allows Springfield to borrow money at the best interest rates available.