Rating agencies Moody’s and Standard & Poors have both reaffirmed the Town of West Hartford’s top rating for an upcoming bond offering, and upgraded the outlook to ‘stable.’
By Ronni Newton
Moody’s Investor Services and Standard & Poors have reaffirmed West Hartford’s triple-A rating, a rating the town has maintained since the 1970s, and after the most recent review both of the nation’s largest bond-rating agencies have also given the town a “stable” outlook.
Standard & Poors uses “AAA” while Moody’s uses “Aaa,” but both denote a top rating.
“I am very pleased that the committed efforts of the Town Council have resulted in an affirmation of the prestigious and coveted triple-A bond rating designation by both Moody’s and Standard & Poors,” Mayor Shari Cantor said. “This does not happen by chance and takes a continuous focus on fiscal responsibility.”
The town received the ratings in advance of a plan to sell $10 million of general obligation bonds on Jan. 22, 2019. Bonds are used to finance capital projects such as road construction, storm water management, park improvements, capital improvements to town and school buildings, and investment in financial management, rolling stock, and technology.
West Hartford’s economy remains strong, and Cantor said that she is pleased that the rating agencies have maintained their confidence in the town’s future as a place where businesses want to be, and where people want to raise their families.
Investments continue to be made in every corner of town – from The Corbin Collection development in the former Sears property in Corbin’s Corner, to the announcement of Target opening in Bishops Corner, to Ideanomics’ proposed Fintech Village on the former UConn campus.
“Along New Park Avenue corridor, an Opportunity Zone has been created with state grants for a new streetscape between CTfastrak transit stations. New residential development, including apartments, condominiums and single-family homes, are continuing to be built,” Cantor noted.
In advance of a bond offering in January 2018, Moody’s had assigned West Hartford its top rating of Aaa, but with a “negative” outlook in recognition of fiscal challenges resulting from state budget uncertainties.
In a narrative that accompanied the current rating, Moody’s stated, “The stable outlook reflects the expectation that the town’s financial position will remain sound given conservative budgeting practices, formerly adopted policies and proactive management. Additionally, the town will continue to benefit from tax base growth, which will support growth in property tax revenues. Lastly, the outlook incorporates the proactive steps taken by management to reduce pension liabilities over the long term and the expectation that the plan’s funded ratio will continue to improve.”
In assigning the top rating with a stable outlook, Standards & Poor’s also noted West Hartford’s strong emphasis on fiscal responsibility and prudent and conservative budget practices.
“We affirmed our ‘AAA’ rating on the town’s GO debt. The outlook is stable. The rating reflects West Hartford’s overall strong budget monitoring and planning framework, which has yielded consistent and positive budgetary performance over the last three audited fiscal years. As a result, the town’s overall stable operating trends supported its maintenance of strong flexibility and liquidity to guard against recent state-level fiscal pressures. We expect West Hartford to maintain a steady pace of economic growth, proactive management environment, and a manageable debt profile over the two-year outlook period,” the narrative stated.
Standard & Poor’s also noted that despite the uncertainty the town has faced regarding statutory aid over the past few years, “West Hartford has demonstrated the ability, when necessary, to raise local revenue from its robust property tax base and appropriate fund balance for contingency purposes to alleviate pressure on its general fund. As a result, the town has outperformed revenue and expenditure projections in each of the last three years, increasing its available reserves to $25.9 million in fiscal 2018 from $21.5 million in fiscal 2016. Further enhancing our view of the stability of West Hartford’s fund balance is the town’s formal reserve policy that sets a minimum reserve level at 7.5% of expenditures.”
West Hartford’s Chief Financial Officer, Peter Privitera, said in a statement, “The Aaa/AAA credit ratings from both Moody’s and Standard & Poor’s reflects West Hartford’s solid economic health, growing tax base, booming economic development, sound and conservative financial strategies, its experienced management team, and long range plans for infrastructure improvements, all desirable factors to the credit rating agencies.”
“I want to thank the town administration for their extraordinary efforts and recognize that our highly-rated and efficient schools play a critical part in this recognition,” said Cantor.
Statewide, West Hartford is one of only 17 municipalities currently receiving the top rating from Moody’s and Standard & Poors. The town is one of a select few nationwide to have consistently maintained a triple-A rating – something West Hartford has achieved since 1974.
Having a top rating allows the town to secure the best possible interest rate for its bonds.
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