A series of City of Berwyn bonds were paid off with new bonds issued earlier this month in an effort to free up more than $3 million for the city’s 2009 budget.

The city sold general obligation bonds in the amount of nearly $5.2 million last week. The money from the sale was used to pay off the remaining principal on the city’s 1998 bonds, along with interest payments on three additional bonds, and interest and principal payments on four other city bonds which were due Dec. 1, according to Berwyn Finance Director John Wysocki.

“What we’re doing is basically refinancing them,” Wysocki said. “Instead of having to make those payments now, they’re being pushed off to the future.”

Wysocki said the city will save $3.3 million, which can be used on the city’s 2009 general budget and deficit. The recently sold bonds are scheduled to be paid annually through 2028.

The Berwyn City Council voted to approve the sale of $15 million in bonds at its Oct. 13 meeting, but Wysocki said a turn in the bond market has changed the Finance Department's plan and is cutting the sale of bonds by two-thirds.

“The bond market went the wrong way on us, so we’re going to hold off on selling more until things go the other way,” Wysocki said.

The city obtained a 4.75 percent interest rate, which Wysocki said could have been much higher had the city not been able to maintain an A-minus bond rating last month.

Berwyn Budget Committee Chairwoman and 1st Ward Alderman Nona Chapman said the group of city officials that met with the Standard and Poor’s bond rating agency showed them how the city would be bringing in new businesses and the plans to lower the budget in order to maintain the city’s bond rating while many other cities, including the city of Chicago, are being downgraded.

“We saved a million dollars on the difference in the bond rating from an A-minus to a B,” Chapman said. “They worked very hard and were on the hot seat for a long time.”

Along with maintaining the A-minus, the city was able to find a company that would insure the bonds using the triple-A bond rating, the highest rating available.

“If we were a triple-B instead of an A-minus to begin with, we probably would have had trouble getting an insurance company to insure us with their triple-A bond rating,” Wysocki said.