A state board yesterday approved Newton's request to pay for the new high school over 30 years.
The decision allows Newton to take out 30-year bonds, spreading the $197.5 million over a longer period of time.
"By spreading out the payment over 30 years, it reduces the stress on the city budget," said Glenn Briere, spokesman in State Auditor Joseph DeNucci's office. "It makes the project much more affordable to the city."
Capital projects are typically bonded for under 20 years, and cannot exceed that number without the approval of the Municipal Finance Oversight Board.
According to Briere, the 30-year bonds are typically granted to cities without great bond ratings to make the project more attractive to investors.
"That's not an issue for Newton," Briere said.
Because the Newton North High School project is a "high-quality project" and because the useful life of Newton North will far exceed the bond period, Briere said that auditors felt comfortable granting 30-year bonds for the project.
The bonds are being issued through the Qualified Bond Act, making the state the paying agent and allowing the city to pay off the debt service through state aid.
According to Sandy Pooler, Newton chief administrative officer, the finance plan for the project does not change. The city won't feel the effect of reduced state aid because state aid will be replaced with money already allocated to North's debt service.
"We are pleased (with the Municipal Finance Oversight Board's approval)," said Jeremy Solomon, spokesman for Mayor David Cohen. "It speaks to our historically sound fiscal practices, including our Triple-A bond rating."
Chrissie Long can be reached at clong@cnc.com.
