Politics & Government

Orange to Save $400G in Upcoming Budgets Through Refunding

First Selectman Zeoli: Results Will Allow for Maintenance, Other Items Left Undone During Recession



When the Town of Orange issued general obligation bonds in 2007, it was pleased with an average interest rate of 3.93 percent.

But with today’s interest rates at historic lows, even relatively recent issues below 5 percent are worth a second look. Orange’s decision to do just that paid off: A refunding the $3.075 million came in at just 1.9 percent, creating budget savings of $401,553.52.

Most of the savings will be realized in FY2013, and will yield $226,247.50 in savings, a result that pleases First Selectman Jim Zeoli.

“While the results were expected, I am thrilled,” he said. Despite talk of the economy getting better, Zeoli said times are still tough in municipal government. This savings will help Orange address deferred maintenance and other items that Zeoli said have simply been on hold since the recession arrived in the fall of 2008.

“This is a huge bonus for us to find at this time,” Zeoli said. “With interest rates at such extraordinary lows, it would have been irresponsible for us not act on this.”

Matthew Spoerndle of Phoenix Advisors, financial advisor for Orange, could not agree more. “Orange is the perfect example of a well-run community that can take advantage of the historic lows in interest rates. We welcome opportunities to work with towns to give taxpayers relief when they need it most.”

The refunding comes with a positive review from Standard & Poor’s, which issued an AA+ rating, as well as Orange’s overall debt. Among the factors cited are the town’s very strong and stable tax base, healthy reserves, and very strong wealth indicators.

Also noted by S&P: Back in 1999, well ahead of most communities, Orange began enrolling new employees into a defined contribution pension plan. This is a change that is benefiting taxpayers today, as relatively few employees will be eligible for pension payments that are locked in, regardless of the performance of investment markets.


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