How much is Newtown’s latest bond rating increase worth to taxpayers? According to finance officials, almost a three quarters of a million dollars.

Finance Director Robert Tait is touting the rock bottom 2.71 percent interest rate Newtown received March 12 on that bond sale as proof that seeking and achieving a AAA bond rating upgrade pays off.

Ahead of the town’s latest $6.5 million in bond offerings to underwrite municipal and school capital projects, Mr Tait and a group of town officials traveled to Boston to meet with representatives of two major bond rating agencies, Moody’s Investors Service and Standard & Poor’s.

Moody’s affirmed Newtown’s Aa1 rating — one notch below a perfect credit score — while S&P upgraded the town one notch to AAA, the top rating available.

Mr Tait and several others who attended the Boston meetings including First Selectman Pat Llodra and Board of Finance Chairman John Kortze believe that upgrade played a major role in Newtown receiving such low borrowing rates for the 20-year bond offering. They believe the savings generated by the upgrade equates to $35,000 per year for the life of the 20-year bonds.

Officials are basing the scope of savings on a bond offering made one day before Newtown by the Borough of Naugatuck. Mr Tait explained that Naugatuck has a bond rating from Moody’s and S&P that is one notch below Newtown, and that community received a 3.25 percent rate on its bond offering March 11.

Mr Tait said while he and Newtown’s bond counsel were waiting for the sale last week, they made a friendly bet that Newtown would achieve a modest savings beyond what Naugatuck received the previous day — estimating a 3.1 percent rate would be forthcoming.

He said nine bidders participated and began competing for Newtown’s bonds. When all was said and done, an investment group from Texas secured the entire offering at 2.71 percent.

Following the finance director’s report to the Board of Selectmen March 17, Mrs Llodra affirmed that the town’s latest bond rating increase translates into “hundreds of thousands of dollars we don’t have to pay in interest.”

“Now we can devote those funds to other things or mitigate taxation,” Mrs Llodra said.

Mr Tait added that, provided Newtown maintains its current bond ratings, the town can count on maintaining similar savings ratios in all future bond offerings.

Following S&P’s decision to upgrade Newtown to a AAA rating February 12, Mrs Llodra attributed the town’s perfect credit rating to the strength of its financial practices and the cast of town employees and volunteer elected officials who make, administer, and advise on those practices.

Newtown’s bond adviser, Barry Bernabe, senior vice president of the Government Banking Group at Webster Bank, said he was notified that S&P based its upgrade on two specific factors: “A strong financial management team,” along with “financial discipline, during the recession, to maintain stable operations and to continue to grow the fund balance.”

Moody’s affirmation report following Newtown’s visit states: “The Aa1 long-term rating reflects the town’s stable financial position which is supported by formal fiscal policies. The rating also considers the sizeable equalized net grand list with favorable socioeconomic indices, and an manageable debt profile.”

Mr Kortze told The Bee that the current status of Newtown’s bond ratings is the result of efforts that began about 15 years ago, when Newtown first began considering implementing a Capital Improvement Plan or CIP, which forecasts or acts as tool to plan capital projects projected five years out.

The more recent implementation of an annual debt or borrowing cap, along with a formalized fund balance policy have further enhanced Newtown’s financial position.