SAUGUS — Six financial institutions competed for the town’s $5.095 million General Obligation Municipal Purpose Loan, with Brownstone Investment Group, LLC ultimately submitting the winning bid at a net interest rate of 3.377%.

Treasurer/Collector Wendy Hatch announced on Wednesday that the bid included a premium of $437,683.50 paid to the town.

“We’ll be receiving that full amount as proceeds of that borrowing,” she said.

A portion of the premium on the bond proceeds is used to pay the closing costs associated with the loan. A portion is also used to reduce the actual debt service or the amount being borrowed.

“We’ve applied $320,000 from the premium to reduce the debt service from an amount being borrowed of $5,095,000 down to $4,775,000,” Hatch said.

While the town will still receive the full amount of the $5,095,000 to fund projects, the application of a portion of the premium reduces the principal amount that must be repaid to $4,775,000.

Hatch then listed off the projects that the proceeds will fund, which included the new fire apparatus, a portion of the purchase price on police cruisers, a jetter truck for the sewer department, the public safety communication upgrades at the dispatch center at the Public Safety Building, improvements to the Lincoln Avenue pump station, design for the upcoming Mass Clean Water Trust project, and $450,000 for improvements to water booster stations.

“I do want to note that when we went into this bidding process this year, we fully expected to have interest rates somewhere in the vicinity of 4%. And with that net interest cost coming in at about 3.37%, I think that says something. And having six financial institutions taking part in the bidding process and offering bids,” she said.

Hatch said part of the process includes obtaining a bond rating from S&P Global Ratings, and that she and Town Manager Scott Crabtree must participate in a surveillance call when the town issues debt service like this.

“I want to note that in the rating report they cited forward-looking management practices, cautionary budgetary practices, positive operations, and aggressive pension funding as all positive credit factors,” she said.

The town’s AA+ bond rating helps reduce the cost of the debt service.

Selectman Jeff Cicolini noted that the spread among the six bids was slightly more than 11 basis points.

“From a risk assessment perspective, that’s telling me that all of these investors are all seeing us under the same lens. It’s not one company bidding just to get the bid. Some are within a half of a basis point, 0.005,” he said, adding that there was once a time the town wasn’t getting any bids and was on the state bond rating.

The Board of Selectmen voted unanimously to approve the sale of the $4,775,000 General Obligation Municipal Purpose Loan of 2026 bonds of the town dated June 25, 2026, to Brownstone Investment Group, LLC, at a price of $5,193,583.50.