Riverhead Town successfully sold $22 million in bonds Tuesday, at an interest rate of just 3.05 percent, town officials announced.
The town was able to secure a low interest rate in part because Moody’s Investors Service upheld Riverhead Town’s Aa2 bond rating, which is the third highest rating Moody’s has for long term obligation bonds. AAA is the highest, followed by Aa1, Aa2 and Aa3. A town’s bond rating affects the interest rates it gets on loans.
“It is a true testament of the sacrifices this town has made over the past couple of years,” Supervisor Sean Walter said Wednesday.
The town budgeted for a 4 percent interest rate in 2012, which means it can spend $120,000 less from the general fund than previously thought. It will also save the highway department about $30,000, Mr. Walter said.
The bonds sold Tuesday are for various projects around town that had previously been unfunded, he said.
“Under the prior administration, numerous projects were not properly funded and, thus, the town has used tax dollars inefficiently,” Mr. Walter said. “By bonding these projects, we can better fund the day-to-day operations of town government, saving taxpayers’ money.”
The town was unable to sell bonds earlier this year until the annual audits for 2008, 2009 and 2010 were completed. All have been finished this year.