SAUGUS — In a money-saving move, Saugus has issued $2,015,000 in general obligation bonds to refinance town bonds originally issued in March 2011.
According to Town Manager Scott Crabtree’s office, the refinancing will generate gross budgetary savings of $343,752 over the remaining 10-year life of the bonds refunded.
“This is such a tremendous opportunity for the town and for the taxpayers of Saugus,” said Crabtree. “The Board of Selectmen and this administration continue to seek opportunities to save money for the community.”
Five companies offered bids on the bond issue, with Robert W. Baird & Co., Inc. providing the winning bid of a 0.576 percent interest rate.
Crabtree said that the majority of savings will come from the restructuring of water and sewer enterprise debt, which will in turn have direct savings in the overall debt service within those accounts.
Selectman Jeff Ciccolini praised the town manager and his team for the accomplishment.
“The refinancing of these bonds at such a favorable interest rate of 0.576 percent is just one more example of the benefits to our taxpayers from our strong fiscal policies and high bond rating,” Ciccolini said. “These savings … will help lower future debt service costs and lessen the burden on our taxpayers in the future.”
Prior to the sale, municipal credit rating agency S&P Global Ratings (S&P) reviewed Saugus’ credit status with the town’s financial management team.
The review covered updates on the local and regional economy, the town’s management practices, finances, and debt position, and other obligations, including other past-employment benefits and pension obligations.
Following the review, S&P’s rating committee affirmed the town’s AA+ bond rating, and the company’s rating report noted the town’s “very strong economy, strong management, strong budgetary flexibility, and very strong liquidity.”
It also recognized Saugus’ management practices as “strong,” and highlighted the town’s formal debt and reserve policies, and its long-term financial plan, in its Financial Management Assessment.
“These ratings will go a long way within the sewer enterprise account and working to maintain low rates to the sewer rate players in Saugus,” said Board of Selectmen Chair Anthony Cogliano. “I want to thank Town Manager Scott Crabtree and the financial team for their due diligence and efforts in saving hundreds of thousands of dollars for the residents of saugus with this refinancing, and millions of dollars with the town’s capital improvement plan.”
Elyse Carmosino can be reached at [email protected].
