Debt

Lexington’s debt comes in two formats: Exempt debt (debt which is not within the tax-levy) and non-exempt (or within-levy) debt. 

In addition, money is set aside each year for the borrowing costs associated with temporary Bond Anticipation Notes (or BAN's). These are bonds associated with projects which have not been permanently issued. The Town chooses to issue the debt when it is most favorable to the Town. 

After authorization from Town Meeting, debt is either temporarily or permanently issued. Temporary borrowing is utilized both for smaller-scale projects and large-scale projects when the Town attempts to secure a better interest rate, state reimbursement or other fiscal advantage. In recent years, cash capital projects, including minor building renovations, equipment purchases and other facilities maintenance have been financed through short-term (three to five year) borrowing. The Town is trying to reduce its reliance on short-term debt financing of maintenance projects. The most recent issuance of permanent debt occurred in April, 2006, where $9,400,000 of debt was issued. The Town took advantage of historically low interest rates and our long-standing “Aaa” rating* to leverage the lowest possible debt service. 

The Town of Lexington generally issues both temporary and permanent debt annually in late winter. Outstanding bond authorizations are reviewed annually, and any unneeded amounts are brought to Town Meeting to be rescinded.