By David Kilby, Special Writer
SPRINGFIELD — The Springfield Township Council invited a financial advisor to its meeting Nov. 1 to discuss a debt management plan, and even though the council took no official action, the members did take in a great deal of financial advice.
David Thompson, chief executive officer for Phoenix Advisors LLC from Bordentown, gave a debt management study at the meeting.
He discussed how there are many different kinds of plans — including those designed for cities, small towns and for developed, developing and undeveloped communities.
”There is no such thing as a one-size fits-all plan,” Mr. Thompson said.
He used the analogy of a leak in a roof to explain how debt just gets worse if a municipality doesn’t come up with a plan on how to manage it, but he said the township’s credit is good enough to get a “high A-category” bond rating again, which is the rating it has now.
”We see Springfield as having maintained its strong financial position,” Mr. Thompson said.
He said Springfield’s bond rating would remain high due to good tax collection and substantial growth over the past few years.
At the meeting, the council discussed a new borrowing plan of $7.75 million, which would cover the township’s current debt of about $2 million and the financing of anticipated future bonds, Mayor Denis McDaniel said.
Some of the projects the council is considering include routine road reconstruction, stormwater drainage repairs and fire apparatus, the mayor said.
”With everything that’s been proposed, the impact on property tax would be highly significant,” he said. “I’m willing to say that because I want people to provide feedback.”
Totally separate from this debt management plan is an opportunity to refinance bonds Springfield made in 2004.
The council’s goal is to refinance its bonds by January, which would cost $60,000, but would result in net savings of $130,000, Mr. Thompson said.
Deputy Mayor Peter Sobotka asked Mr. Thompson how much flexibility the township would have when issuing a bond.
Mr. Thompson said if a bond was issued for street repairs, for example, the bond would have to be amended if the township changed the street to be repaired with the bond money.
He said the more specific, the better, and the sooner the money borrowed is used, the better.
”Don’t borrow any more than what you’re going to spend in the next three years,” he advised, but “when bond rates are low, sometimes it’s good to take advantage and fill up your tank.”
Interest rates are extraordinarily low right now, often below 2 percent, thus many municipalities and school districts are taking advantage of that low rating.
Mr. Thompson also gave a little background on the other side of the bond process, saying bonds usually are bought by institutions and banks, but in the end — regardless of who buys or sells the township’s bonds — the township would pay the same amount.
”You know the moment you sell what you’ll be paying for the next 10 years,” Mr. Thompson said.

