Minutes for the special meeting held on April 24, 2008


The regular meeting of the Newtown Township Financial Planning Committee met on Thursday, April 24, 2008 in the meeting room at the Newtown Township Municipal Building.

Members present were Elaine Gibbs, John Stranford, Glenn Beasley, Mike Gallagher and Jim McCrane. Excused were Robert Dieterle, Brian Wilson, John Nejman, Philip Newmuis and Michelle Goldberg.

Also present were Michael Wolf, Boenning & Scattergood, Inc. and Scott Shearer, The PFM Group.


Mr. Beasley called the meeting to order at 7:20 P.M.


Mr. McCrane moved to approve the minutes of March 27, 2008. The motion was seconded by Mr. Stranford and passed unanimously (5-0).


Mr. Gallagher moved to approve the minutes of April 8, 2008. The motion was seconded by Mr. McCrane and passed unanimously with one member abstaining (4-0-1).

Old Business:

Discuss Municipal Complex Expansion

Boenning & Scattergood, Inc. presentation by Michael Wolf

Mr. Wolf made a presentation to the Committee; he advised on Boenning & Scattergood’s history with the Township and within Bucks County. He discussed the benefits of having multiple bond issues and the yield spread for bank vs. non-bank qualified. He provided two options – Option 1, $10,000,000. for 30-years and Option 2, $10,000,000. for 25-years.

Mr. McCrane commented with regards to principal and interest; he questioned if the bond would be structured similar to mortgage style level pay. Mr. Wolf advised that it would be similar to mortgage style level pay the only difference is that bonds only pay principal once a year, can only pay off in $500,000. amounts and that interest is semi-annual.

Mr. McCrane commented with regards to the discount rate used for the PV calculations. Mr. Wolf advised that the rate traditionally used is the cost of funds or the arbitrage yield.

Mr. Beasley questioned if the interest rate would change. Mr. Wolf advised that the interest rate would be locked.

Ms. Gibbs advised with regards to the Township borrowing $1.5 Million. Mr. Wolf advised with regards to how that debt could be handled.

Mr. McCrane questioned if the bonds get rated. Mr. Wolf advised that the bonds are rated by Moody’s; he discussed bond insurance.

Ms. Gibbs questioned Mr. Wolf if he has reviewed the Township’s rating. He advised that he has not reviewed the Township’s rating.

The members discussed the Township’s rating and if bond insurance will be needed. Mr. Stranford questioned the cost of bond insurance. Mr. Wolf advised that on a $10,000,000.00 bond he is budgeting $70,497.28 for a one-time upfront payment. The members discussed bond insurance paying for itself.

Mr. Wolf advised on various alternatives to bonds; he discussed the bond pool. He advised on work done by Del Val.

Mr. Stranford commented on the Del Val idea – doing multiples bonds for smaller amounts. Mr. Wolf advised that option is not always available.

Mr. Wolf reported with regards to competitive and negotiated sales.

Mr. Wolf advised with regards to the services that are provided by his company; he explained the difference between the coupon and the yield.

The members discussed the definition of yield.

Mr. Wolf advised with regards to the sliding scale for fees.

Mr. Wolf discussed his more recent eleven-month history of correspondence with the Township.

Ms. Gibbs questioned the timeline for the process if the Township chooses to proceed; she discussed the Township’s situation. Mr. Wolf advised that he would need a minimum of 60-days.

Ms. Gibbs advised that she has kept the rating companies up to date with regards to the Township’s statements.

Mr. Gallagher discussed possible scenarios for borrowing and spending money. Mr. Wolf advised with regards to scenarios regarding borrowing, spending and rates.

The members thanked Mr. Wolf for his time.

The PFM Group presentation by Scott Shearer

Mr. Shearer made a presentation to the Committee; he reported on PFM’s history and their work done in Bucks County and other local counties. He discussed competitive and negotiated sales with regards to borrowing.

Mr. McCrane questioned the rate differential between competitive and negotiated borrowing. Mr. Shearer advised on his experiences with regards to rates and competitive and negotiated sales.

Mr. Shearer reported on the role of an independent Financial Advisory, the next steps if the Township chooses to proceed, the benefits of competitive sales and the use of underwriting firms for negotiated sales. He advised on the Internet auction process and the benefits. He reported on PFM’s history with the Township. Ms. Gibbs confirmed that the Township used PFM last year to borrow $1.5 Million.

Mr. Shearer advised on the two scenarios he has provided for review. Option 1 – All Municipal Complex projects, 25-year financing. Option 2 – All projects except renovations to the Public Works building for Parks and Recreation, 25-year financing.

Mr. Beasley questioned the fees involved. Mr. Shearer advised that the fees for this type of transaction ranges between $10,000.00 and $12,000.00 and are only paid if the transaction is completed or it could be arranged to pay an hourly fee.

The members discussed having a Bond Counsel.

The members discussed the various fees involved.

Mr. Shearer advised with regards to bank qualified vs. non-bank qualified.

Mr. Shearer advised on the next steps in the process and the timeline if the Township would like to proceed.

The Committee thanked Mr. Shearer for his time.

The members discussed the two presentations.

Mr. McCrane advised that after hearing the presentations that he favors the competitive bidding process.

Ms. Gibbs reported on the job done by PFM.

Mr. Gallagher suggested having a member make a recommendation at the May 28, 2008 Board of Supervisors meeting. Mr. Beasley suggested that Mr. McCrane make the recommendation at the meeting on May 28, 2008. The members agreed to recommend PFM.

The members discussed PFM’s competitive bidding process.

MuniCast Software

Mr. Gallagher advised that the Supervisors approved the purchase of the MuniCast Software at the April 23, 2008 meeting.


Review of Capital and Operating Budget Process

Ms. Gibbs reported with regards to the Capital Budget reviews. She advised that the review dates are scheduled for May 22, 2008 and June 26, 2008. Currently the departments scheduled for May 22, 2008 are Police, Emergency Services, Technology and Parks and Recreation. The departments scheduled for June 26, 2008 are Code, Public Works, Administration and Finance. She discussed the Committee’s role in the review process and the presentation of the Budget to the Supervisors. She recommended that the members review their copies of the schedules.

Mr. Beasley commented on the Committee’s involvement with regards to the reviewing of the Budget. He requested Ms. Gibbs to provide the members with the process for putting the Budget together by May 15, 2008. Ms. Gibbs advised that she would discuss the request with Mr. Czajkowski and update the members.

Committee Membership

The members discussed the resignations from John Nejman, Philip Newmuis and Michele Goldberg; it was agreed that their information would be removed from the membership list.

Ms. Gibbs advised on a resume received from Ronald Kaizar; she will forward a copy to the members and have Ms. Garcia put in the Supervisors’ packets.

Mr. Gallagher updated the members on Mr. Wilson’s status.

Ms. Gibbs advised that she would request the Township’s website to be updated showing that the Committee is looking for three new members.


The members discussed the May 22, 2008 meeting.

Mr. Beasley updated the members with regards to his report to the Supervisors at the April 9, 2008 meeting.


There being no further business to come before the Committee, the meeting was duly adjourned.

The next meeting is scheduled for May 22, 2008 at 7 P.M. The meeting will be held in the meeting room at the Township Municipal Building.



Respectfully submitted by:


Christy Holley, Recording Secretary