The capital bond would fund additional repaving of the Burlington Bike Path, and more.
Unhappy with uneven sidewalks or Burlington's bike lanes? Here's your chance to put your money where your mouth is.
On Monday, the city will launch an effort to issue up to $8 million dollars in city infrastructure bonds to citizen investors via Neighborly, a San Francisco-based start-up company.
Chittenden County residents will have first dibs at purchasing the bonds through the program before the process is opened to all Vermonters. The program is expected to be fundedby the end of the month, according to Rich Goodwin, the city's director of financial operations.
Under the Neighborly program, the repairs to the bike path can be paid for by the people who live alongside it and use it daily, said James McIntyre, the head of public finance for the four-year-old company. He described investment as a path for democratic involvement for citizens.
"Everyone who lives in the city of Burlington has a vested interest in these bonds whether they realize it or not," he said.
Last September, Burlington participated in the Neighborly Bond Challenge in Los Angeles, winning the chance for Neighborly to work free-of-charge as the city's broker-dealer. Of the pool of about two dozen entrants, Austin, Texas; Somerville, Mass.; Housing Trust Silicon Valley; and Lawrence, Kansas were also winners.
People can invest a minimum of $1,000 for between one and 20 years, which will yield an interest rate estimated to be between 1 and 4 percent, depending on the maturity of the bond, McIntyre said. The bond pricing will be released on Monday afternoon.
The bonds would be part of Burlington's 10-year, $27 million sustainable infrastructure plan, which voters passed in November 2016. According to Goodwin, the proceeds will cover "capital improvement infrastructure projects in Burlington including the waterfront bike path, building infrastructure, and possibly streets and sidewalks."
Between 250 and 300 people have signed up already to invest, McIntyre said. He sees it as a way to participate in local government or weigh in on the city's development decisions.
Goodwin touted the program as a means to lower transaction costs for the city — officials expect to save up to $185,000 — and make municipal bonds available to a wider range of investors. The minimum denomination of $1,000 is less than the typical $5,000, said Goodwin.
This is the first time Burlington has run such a program, though the state has been issuing small-denomination bonds for more than two decades, according to Goodwin.
"If the Neighborly program does prove successful in bringing down the cost of issuing bonds, the city may very well pursue this program in the future," Goodwin wrote in an email to Seven Days. "The city would likely evaluate whether or not to extend the program in the fall of 2018."