West Hartford Maintains ‘AAA’ Rate, Sells $15 Million General Obligation Bonds

West Hartford Town Hall. Photo credit: Ronni Newton

West Hartford received a competitive rate for Thursday’s bond offering, with Standard & Poor’s reaffirming the town’s ‘AAA’ rating with a stable outlook.

By Ronni Newton 

The Town of West Hartford sold $15 million of general obligation bonds Thursday morning, obtaining a very competitive rate of 3.02% True Interest Cost (TIC) for the offering after receiving 11 bids, Town Manager Rick Ledwith said.

The general obligation bonds will be used to fund projects in the capital improvement program, including updates to streets, stormwater management, and investments in schools and other municipal buildings including security upgrades.

Town officials said the rates were the best-available at the time of sale, and “an excellent indication of the town’s strong financial position and AAA status.”

In advance of the offering, Standard & Poor reaffirmed West Hartford’s “AAA” rating – which the town has held since 1974. “S&P Global Ratings views the outlook for this rating as stable,” the agency also said in a letter to West Hartford Chief Financial Officer Peter Privitera.

“West Hartford has been the recipient of the highest credit ratings for many decades – a distinction that reflects the town’s strong fiscal management and strong year-over-year financial positions,” Privitera said in a statement.

In the credit overview included in their current report, S&P stated: “Highlighting West Hartford’s general creditworthiness are its very strong financial management and sustained financial strength over the past decade. The town has actively managed its long-term liabilities and has maintained available reserves and liquidity at very strong levels,” S&P stated.

Supporting factors listed by S&P in their report include:

  • West Hartford’s strong and diverse local tax base, that benefits from the broader metropolitan area economy;
  • Strong budgetary assumptions, monitoring, and capital planning highlight management’s strengths;
  • Conservative budgeting practices and performance, including maintenance of strong reserves and liquidity with the goal to increase them further over the coming years despite growing costs;
  • Manageable debt profile with limited future debt plans that will materially affect current ratios; and
  • Proactive management of long-term liabilities will lead to manageable cost escalations.

Noting the town’s decision in 2021 to issue pension obligation bonds to fund its pension system’s unfunded actuarially accrued liability and to stabilize fixed costs, S&P cited that as a positive, and stated in the credit overview: “It issued pension obligation bonds (POBs) in 2021 to fund its pension system unfunded actuarially accrued liability, and continues to make progress in funding its other postemployment benefit (OPEB) liability. Providing credit stability over our outlook horizon is the town’s stable financial position and track record of strong performance through various economic and business cycles.”

“Our financial stability is significantly improved by fully funding our pension fund with Pension Obligation Bonds, stabilizing town pension contributions, and adding to our unrestricted reserves,” Mayor Shari Cantor said in a statement.

“We have a historically high and robust fund balance and with our new fund balance policy we can build on the fund balance without further taxing our residents to do so. West Hartford is unique to other highly-rated communities in its vibrancy, diversity, commitment to sustainability, and inclusivity. We have excellent public schools and outstanding public safety and we are repeatedly recognized as one of the best places in our state and country to live, work, and play,” Cantor added.

“The AAA credit rating from Standard & Poor’s reflects our vibrant and growing economy and, conservative financial strategies, and will allow us to reinvest in our community with a variety of capital projects,” said Town Manager Rick Ledwith.

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