LEWISTON — A bond refinancing last week will save the city $3.7 million over the next decade.

Lewiston Finance Director Heather Hunter said a positive review of the city’s fiscal health and good timing helped secure some lower interest rates.

“We had hoped to save $3.4 million, so when we did better than that, I was ecstatic,” Hunter said.

The city sold $52,416 worth of general obligation bonds on Feb. 12.

Those bonds included a first time sale of the city’s 2013 capital improvement bond and refinancing packages for bonds issued in 2003, 2004, 2005 and 2006.

Hunter said the city was given a AA- rating with a positive outlook by Standard and Poors bond rating agency. According to the rating agency, that represents a city “with a very strong capacity to meet its financial commitments.”

It’s the second year that Lewiston has maintained that rating, and Hunter said the rating agency based that on the city’s stable local economy, strong financial operations and moderate overall debt burden.

The city’s bond sale was also buoyed when the buyers agreed to $1.45 million in fees.

“The benefit of that is that it reduces the entire outstanding principle on our books,” Hunter said. “It’s now a premium, not interest we will be obligated to pay in the future.”

According to the city’s 2014 Capital Improvements Plan, the city’s 2013 authorized bond issue was $22.8 million. The remainder of bond sale was devoted to refunding old debt and that’s where the city saved.

Hunter said the city was hoping to reduce debt payments by $3.4 million with the reissue but was warned before the sale that interest rates were trending up and that the city’s savings would be significantly less. Many of the cities and other bond issuers decided to skip the sale because of those concerns.

“But clearly we were ready to go to the market,” Hunter said. “A lot of municipalities and corporations had pulled out. They delayed, so we ended up being one of the few going to market this month. It clearly benefited us.”

The city was able to get the average interest rates on those bonds reduced from 3.99 percent 1.6 percent.

Those savings will be spread over the next 10 years, saving the city an average $250,000 per year.

The city had $167 million in outstanding debt as of Dec. 31. That includes $70.2 million for the city, $34.6 million for the schools and $39.5 million for Lewiston’s water, sewer and storm water utilities.

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