BANGOR – Conflicting outlook opinions issued by two major credit rating agencies won’t have an adverse affect on the interest rates that the city pays when it goes out on the market to issue bonds, the city’s finance director said Friday.

“It won’t,” Finance Director Debbie Cyr said. That’s because potential investors “will look at both” reports.

Last month, New York-based Moody’s Investors Service issued its latest opinion regarding Bangor’s finances. While the agency upheld the city’s Aa3 bond rating, it assigned the city an “unfavorable” outlook.

“The Aa3 rating reflects the city’s role as a major regional economic center and manageable debt position,” Moody’s report stated.

“The negative outlook reflects the city’s finances, which have narrowed to a level inconsistent with an Aa3 rating, and Moody’s belief that the city is unlikely to rebuild reserves to historical levels, which approximated 25 percent of revenues, given new limitations on property tax increase and the city’s undesignated General Fund balance of just 7.5 percent of the previous year’s expenditures,” Moody’s report stated.

At the same time, Standard & Poor’s of Boston issued a similar rating of AA-minus, but characterized Bangor’s outlook as “stable.”

“The stable outlook reflects the expectation that the city will maintain its positive financial operations and reserves as its economic and property tax base continue to grow,” the Standard & Poor’s report read.

“Bangor’s property tax base is expected to continue to experience growth equal to, or greater than, year-over-year budgetary demand so that management can maintain a structural balance between revenues and expenditures within the constraints of Maine’s property tax levy limitations. The stable outlook also reflects the expectation that the city will manage its capital needs while maintaining a low and manageable debt burden.”

Despite Moody’s negative outlook, when the city sold bonds this month, six investors made offers in a competitive bid process that yielded an interest rate of 4.11 percent, well below prevailing market rates.

Last year, she said, the city issued bonds at 3.95 percent interest. Since then, interest rates have risen a quarter percent each quarter.

Asked about the agencies’ differing outlooks, Cyr said that the same Standard & Poor’s analyst has followed Bangor finances for the past several years and is comfortable with the city’s financial management practices.

Moody’s, she said, changed Bangor’s outlook from “stable” to “unfavorable” because it thinks the city should keep more money in its undesignated fund balance, an account formerly referred to as surplus.

“It’s just their perception of what kind if financial flexibility we have,” Cyr said.

“They’re concerned about the drop-off in our [undesignated] reserves,” Cyr said.

“The level has been dropping off for the last few years but it’s still within the parameters [set by city councilors],” she said.

The city charter stipulates that between 5 and 10 percent of each year’s gross operating budget be socked away in the undesignated fund balance, an account once referred to as surplus, Cyr said.

As a matter of policy, the council shoots for at least 7.5 percent, “which is where we are,” she said.

“The biggest drain on our reserves [in recent years] is the Penobscot River cleanup, she said.

The river cleanup, projected to cost between $12 million and $20 million, is the focus of a legal battle that began in 2002 when the city sued Stamford, Conn.-based Citizens Communications Co.

Citizens is the successor of a series of corporate entities that owned and operated Bangor Gas Works, claiming that the plant was the sole cause of the pollution.

Citizens denied responsibility for the pollution. It filed a dozen third-party lawsuits alleging that others, including the city, should pay for the cleanup because they, not Citizens, were responsible for the 10-acre, plume-shaped coal-tar deposit.

So far, the city has spent $4,455,000 on legal fees connected to the lawsuit, according to Cyr. Another $1 million has been budgeted for the coming year.

A judgment is pending, she said.