Rating agencies Moody’s and Standard & Poors have both reaffirmed the Town of West Hartford’s top rating for the most recent bond offering.
By Ronni Newton
The Town of West Hartford sold $17 million in general obligation bonds Thursday, at the lowest interest rate received in the past decade, following reaffirmation of highest bond rating.
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, indicating a very low risk to lenders. Less than 1% of municipalities nationwide earn the top rating from both agencies, and West Hartford is one of very few that has maintained the top rating for decades.
According to a news release from the town, this year’s rate was 1.485494%, down from last year’s interest rate of 2.652298%.
“This is great news for West Hartford,” Peter Privitera, the town’s CEO, said in a statement. “This incredibly low interest rate means that it will cost us significantly less to fund our capital projects.”
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.
The Board of Education began review of its Capital Improvement Plan last week, and Hart will present the town’s portion to the Town Council in March, and the entire budget will be adopted in late April.
“We are very proud and pleased to be awarded this prestigious distinction for our strong and solid fiscal strategies and management,” Mayor Shari Cantor said in a statement.
Cantor noted the strength of the town’s economy and investments spread throughout town – from the redevelopment of the former Sears property into the Corbin Collection, to the state’s first small-format Target store in Bishops Corner, to investment activity in the town’s New Park Avenue corridor, which is also an Opportunity Zone.
“We are looking forward to the creation of a new streetscape between CTfastrak transit stations to encourage additional reinvestment,” Cantor said regarding the New Park Avenue area. “New residential development, including apartments, condominiums and single-family homes, are continuing to be built throughout our community,” she added.
In its narrative accompanying the current rating, Moody’s stated: “The Aaa rating reflects the town’s sizable and growing tax base, strong resident income and wealth profile, stable financial position and moderate long-term liabilities. The stable outlook reflects the expectation that the town’s financial position will remain stable given conservative budgeting practices and formally adopted policies. The town’s tax base will benefit from ongoing development projects, which will support property tax revenue growth. The outlook also incorporates the town’s proactive management of long-term liabilities and the expectation that the pension plan’s funded ratio will continue to increase.”
Standards & Poors also noted the town’s fiscal management, and stated in their report: “West Hartford has a very strong set of financial policies and controls that are institutionalized and embedded into its overall financial management, and, in our view, is a key factor contributing to its ability to sustain budgetary balance through a period of slow economic growth statewide and past state aid revenue pressures. We expect the town to maintain a steady pace of modest economic growth and a manageable debt profile over the two-year outlook period. In our view, these factors will allow it to maintain strong flexibility and liquidity to guard against potential state-level fiscal pressures, which we note remains a budgetary consideration, particularly if economic deterioration occurs.”
Town Manager Matt Hart said, “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 of which are viewed as desirable by the rating agencies.
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