Both Standard & Poors and Moody’s have given West Hartford the highest rating for bonds that will be sold on Jan. 29, 2015.
By Ronni Newton
West Hartford officials learned recently that both Standard & Poors and Moody’s 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 he is “very pleased” with the continued affirmation of West Hartford’s financial strength.
The town received the ratings in advance of a plan to sell $21 million of general obligation bonds on Jan. 29, 2015. The top rating should ensure that West Hartford will receive an excellent rate for its bonds, Van Winkle said.
The bonds will finance projects such as road construction, storm water management projects, and capital improvements. Approximately $9 million will go toward the construction of the new Charter Oak International Academy, scheduled for groundbreaking this March.
In addition to issuing the AAA rating, Standard & Poors viewed the outlook for the rating as “stable.” In a document to the town issued Jan. 16, 2o15, describing the rationale for determining the rating, S&P highlighted the following factors:
- “Participation in a broad and diverse economy with very high wealth and per capital incomes;
- “Strong budgetary flexibility with 2014 audited available reserves in excess of 13 percent of general fund expenditures;
- “Strong budgetary performance and stable revenue profile with no appreciable funding interdependence with the state or federal government;
- “Very strong liquidity providing very strong cash levels to cover both debt service and operating expenditures
- “Very strong management conditions and strong financial policies;
- “Adequate debt and contingent liabilities profile, but bolstered by the town’s aggressive amortization and low debt as a percentage of market value; and
- “Sizable pension and other postemployment benefit (OPEB) liabilities, although management is proactively managing these.”
Standard & Poors described the town’s financial management as “strong” based on conservative revenue and expenditure assumptions used in planning, strong capital and financial planning, and a debt management policy that limits spending of reserves to emergency situations.
The review also highlighted potential growth of West Hartford’s tax base through construction of the Delmar hotel (expected to begin this spring) and other ongoing construction projects of residential and office properties as well as the new Walgreen’s store currently being built on Farmington Avenue.
The potential for a “taxable development” on the UConn property was also mentioned by Standard & Poors. The West Hartford campus is expected to be vacated in 2017, and town leaders have had discussions about the future of the property, although nothing can go forward until the state officially declares it as surplus. West Hartford will have the first right of refusal to purchase the property, which is zoned residential and has a significant area of wetlands.
Moody’s, which issued West Hartford its highest rating of Aaa last week, said that the town “remains well-poised for cotinued growth moving forward.”