METHUEN — When Methuen goes to borrow money this year to buy police cars and a firetruck, the debt will not be backed by city funds alone but also with local aid included in the state budget.
Yesterday, the state Municipal Finance Oversight Board approved applications from Methuen, Salem and Pittsfield that will allow them to use the state's credit rating to back local bonds.
The state's credit was recently rated AA, AA+ and AA1, which translates to "very strong," and is a step above the three cities, which have ratings of A or A1, defined as "strong."
A stronger bond rating means lower debt service payments.
In Salem's case, the state rating could save the city an estimated $425,000 as it borrows money to build a new school, make repairs at city hall, buy new police cars and implement other projects.
Methuen was authorized to borrow $2.3 million for new police cars and a firetruck.
In the case of Methuen, those authorizations are likely higher than what the cities will borrow, but in order to qualify for state and federal reimbursements the cities need to authorize the full amount of the projects.
The board, whose chairwoman is State Auditor Suzanne Bump, asked city representatives brief questions but appeared satisfied by the reams of documents included in their applications.
Cinder McNerney, a financial adviser to Methuen, said that the Pittsfield Municipal Airport is hoping to receive federal and state funding that would only leave the city with a $3 million bill.