Bill > H2262

This bill authorizes the town of Southborough to issue pension obligation bonds or notes to fund its portion of the unfunded pension liability in the Worcester regional retirement system. The bill allows the town to issue bonds with terms not exceeding 30 years and outside the usual debt limit, with the proceeds specifically dedicated to reducing the town's pension liability. Before issuing the bonds, the town must submit a financing plan to the executive office for administration and finance for approval. The amount of bonds issued cannot exceed the amount needed to extinguish the unfunded pension liability, as determined by an independent consulting firm and approved by the public employee retirement administration commission. The bill also requires that bond maturities be structured to have nearly equal annual principal and interest payments and allows for the establishment of a reserve fund. If the unfunded pension liability involves employees from multiple governmental units, those other units will be responsible for reimbursing Southborough proportionally. Additionally, the bill stipulates that the portion of annual debt service related to school department personnel can be included in net school spending calculations. The legislation will take effect immediately upon passage.

Budget and Finance, Government Affairs

https://malegislature.gov/Bills/194/H2262