Mayor: City reaps $2.8 million in 'taxpayer savings'

City Hall in Milford, Conn.

City Hall in Milford, Conn.

Brian A. Pounds / Hearst Connecticut Media

MILFORD — The city has doubled what officials are calling “taxpayer savings” that now add up to $2.8 million.

Mayor Ben Blake said, in a Dec. 2 announcement, that in addition to the $1.4 million in refunding savings from last month, “the City will capture another $1.4 million,” resulting in “$2.8M taxpapyer savings by refinancing decade-old loans the City has with the State of Connecticut under the Clean Water Fund (CWF) program.”

The state’s 2 percent CWF loans were made with Milford 10-14 years ago to improve local sewer treatment facilities, the mayor said. This loan had historically been a better option than issuing bonds in the capital markets, he said. “With interest rates for municipal bonds at record low levels and subscriber demand for Milford’s AAA bonds at an all-time high, the City was able to lock-in another $1.44 million in debt service savings by refinancing,” the announcement said

Officials say this is the first time interest rates on bonds in the capital markets are significantly less than the state’s 2 percent program. So, many issuers are looking to take advantage of the fiscal environment by refinancing state loans — Milford is one of the first, they say.

The city received a total of 11 bids with interest rates ranging from a winning bid of 0.33 percent to a high bid of 0.49 percent, the announcement said. The sale was highly competitive with all bids within 16 basis points (0.16 percent) and the winner edging out the the second place bid by 0.01 percent, it said.

“This is another win for Milford taxpayers,” said Mayor Blake, “the savings will help keep our debt service costs as low as possible.”

“I’ve been doing this for over 20 years,” said Matthew Spoerndle, senior managing director of Phoenix Advisors and Milford’s municipal advisor. “I can honestly say that I never thought that interest rates would go low enough to be able to refinance those CWF loans for this level of savings, and yet, here we are. Talk about good timing! It’s another outstanding result for the City of Milford!”

“I am very pleased with these results and how well the refundings were structured. This is great news for the City,” said Director of Finance Peter Erodici.

This bond refunding, which officials called historic, comes, they say, on the heels of a financial rating review wherein the rating agency, Fitch, reaffirmed Milford’s AAA bond rating, the highest possible credit grade a city can receive.