Lifestyle, Local Government and Politics, News

Saugus Selectmen approve $500,000 for storm-project work

SAUGUS — A half-million dollars in bond financing approved by the Board of Selectmen will help pay for town stormwater management efforts.

The Stormwater Management Program is run by the Department of Public Works. 

Authorization for the bond was previously approved by Town Meeting in May 2021 and was reaffirmed in May this year.

The town received the bid from Newburyport Five Cents Saving Bank for the full amount with an interest rate of 2.87 percent with interest in the amount of $12,436.67.  

Unlike a previous bond anticipation note (BAN) for $1.5 million the town authorized for the purchase of police cruisers and for building improvements to town-owned buildings, which were needed to comply with COVID-19 protocols, Newburyport Five Cents Savings Bank was the only bidder for the stormwater management note.

The firm also won the bid for the $1.5 million BAN. They offered the most competitive rate of 1.86 percent, in comparison to two other bidders – Piper Sander & Co. and Oppenheimer & Co. that offered 2.31 percent and 2.38 percent interest rate respectively.

Newburyport Five Cents Savings Bank’s 2.87 percent interest rate for the latest BAN in line with the town financing expectations, said Wendy Hatch, Saugus finance director and treasurer/collector. 

Hatch said that interest rates have been on the rise since last year when the town issued this bond at an interest rate of less than 1 percent. This time Hatch said that the town was still concerned that the interest rate was going to climb and that was going to affect the interest the town would have to pay.

Hatch said the town was looking to borrow earlier rather than later to make sure it gets the lowest interest rate possible in the current economic conditions.

“It’s the economy,” said Hatch.

Selectman Jeffrey Cicolini said that it was becoming more and more difficult for banks to commit to BANs, given the interest rate environment, and that, to his knowledge “they were coming in somewhere between 3 percent and 4 percent.”

“That stuck out when I read the quotes that came in from a small-town bank like Newburyport putting in on bid and being the lowest bidder,” said Selectman Michael Serino. 

Hatch said Newburyport was a surprise choice and noted that the current financial environment has resulted in a lot of money on deposit paid by the federal government at a time when people are not taking out loans.

“Quite frankly it’s because they have too much money, and they need to borrow it out,” she said. 

Oksana Kotkina can be reached at oksana@itemlive.com.

More Stories From Saugus