West Hartford Retains AAA Bond Rating
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West Hartford Town Hall. Photo credit: Ronni Newton
Both Moody’s and Standard & Poors have given the Town of West Hartford the highest possible rating for bonds that will be sold next week.
West Hartford Town Hall. Photo credit: Ronni Newton
By Ronni Newton
West Hartford officials learned this week that Moody’s and Standard & Poors have reaffirmed the town’s AAA bond rating, a rating that West Hartford has held since the 1970s.
Town Manager Ron Van Winkle said that since the town has had the top rating for so long, it’s become the expectation of many residents.
“It takes a lot of work to stay within those bounds,” he said. “It’s not a small effort on the part of the Town Council and staff that we provide quality service and do it with financial responsibility,” Van Winkle told council members, even if it has become the norm.
“We’re very excited,” Van Winkle said. “It is a celebration that we should enjoy that this town is considered the best in the nation when it comes to financial responsibility.”
Van Winkle said that because of the top rating, he expects to receive an excellent interest rate on the $14 million of general obligation bonds that will be sold on Thursday. The bonds will finance projects such as road construction and capital improvements to school buildings.
In a narrative, Moody’s wrote that the “Aaa long-term rating reflects West Hartford’s robust economy and sizable tax base, favorably located just outside the state capital. The rating also incorporates the town’s historically stable financial position with adequate reserve levels. Further, the rating factors in the town’s above average wealth and income levels, manageable pension and OPEB liabilities, and slightly elevated debt burden with rapid principal retirement.”
Moody’s assigned an outlook of “stable,” citing the expectation that the town will “maintain a satisfactory financial position due to conservative budgeting practices and adherence to formal fiscal policies.” Ongoing commercial and residential development which will increase the tax base, including the 320 residential units currently under construction throughout town and the Delamar Hotel scheduled to open in 2017, also contributed to the stable outlook.
Van Winkle said he has been notified that Standard & Poors has also issued the AAA rating, but they are in the process of moving their offices and have not yet provided the narrative.
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I am glad that Moody’s and Standard & Poors have reaffirmed the town’s AAA bond rating. As the article states this will help the town continue to receive favorable interest rates when they bond projects. However, the Town now has one of the lowest funded pension funds in the State of Connecticut. We continue to use an interest rate for projections that is so far from reality that we will be in this position for the foreseeable future. Our pension fund is about 40% funded. When you add our unfunded pension liability to our unfunded Retiree health benefits you can expect property taxes to continue to increase at an alarming rate.