LEWISTON - City staff took a look at the bond markets last week and decided to pass.

The nearly $30 million in municipal bonds that the city intended to float this month will likely be pushed back to December, Finance Director Richard Metivier said.

"Given the current situation, we'd feel better postponing to see more stability in the marketplace," he said. "We expect we'd get some bids, but clearly feel the cost of bonds might be higher than if we postponed until December."

The city had intended to float the bonds on Oct. 20, the same day the state announced it expected to sell its $50 million transportation bond. The city's bonds will be used to pay for a new elementary school and other public improvement projects.

On Friday, Maine State Housing said it would begin selling bonds directly to Maine-based investors, rather than go through brokers as it customarily does. Between $20 million and $30 million in bonds will be offered at 5 percent interest exempt from state and federal income taxes. The money from the bonds will be used to fund the agency's first-time home buyer program.

Metivier said the bond market in general is sensitive to supply and demand.

"There's still an uneasiness out there," he said, noting that a lot of people are putting money away and not looking for investments until the markets settle down. The Dow Jones Industrials reported record volatility by week's end, with Friday's trading capping a 1,000-point spread over the course of the trading day - the biggest range ever.

The city intends to issue its bond in two series: $18,975,000 to pay for the new Geiger school, which is replacing the former Pettingill school, and $10,665,000 for other capital projects.

Metivier said the delay in bidding the bond means the city will have to look at a short-term note to pay a $9.4 million bond anticipation note that is due Oct. 30. He said the city will likely issue another note of $10.8 million to pay off the $9.4 million note, and to provide financing until the December offering.