Margarita M. Phillips 
FAIRFIELD — The Department of Finance is seeking better rates on $15 million worth of bonds, which officials say could save hundreds of thousands of dollars.
Comptroller Caitlin Bosse told a recent Board of Selectmen meeting that the finance department is watching interest rates closely and aims to save 3%, or about $450,000, if they can lock in a rate at the right time.
She said paying off city bonds was very similar to refinancing a mortgage on a house.
“Basically, rates have come down on a couple of our bonds,” she said, noting that one is from 2012 and the other is from 2014.
The change received the approval of the Board of Selectmen and the Board of Finance, but still requires the authorization of the representative municipal assembly. Officials said they were getting it ahead of time so they could jump at the chance when it presented itself.
“It gives us the ability to react if the markets change and the situation arises,” said Jared Schmitt, chief financial officer.
Schmitt said two or three weeks ago was a good time to do so, but less so now due to recent volatility in the economy.
“But, again, things are changing quickly and we would like to have the ability to react if it goes the other way,” he said.
Fairfield bond adviser Matt Spoerndle said the bonds in question could be redeemed this summer. Once this option is open, it remains until the deposit is refunded.
“There would be nothing stopping us from doing that at some point in the future if rates were to drop further,” he said, adding that the option would generally be pursued in a good market. “It’s good to have things lined up that we can act on quickly if the market is right.”
Spoerndle said the city could choose to save less than 3% if officials deemed it necessary. He also noted that the city has a lot of flexibility in where these savings are made and how they impact the budget.
“Some cities like to take it the first year or two,” he said. “Some will just spread it evenly throughout (the bond redemption). It’s not something that needs to be decided today.
Spoerndle said the city would have the option of rejecting all offers if they weren’t comfortable with the outcome. A government bond auction is the process of selling short-term and long-term government bonds to investors with the aim of minimizing the cost of financing national debt.
“It usually doesn’t get to that point because we know where the market is and wouldn’t necessarily force it into the market if it didn’t look like it was going to work out,” he said. “If you approve of this tonight, it doesn’t lock you into anything except the ability to continue if the numbers work out.”
