Press Release:
WEST HARTFORD, CONN. (February 24, 2023) – This week, Town officials announced the sale of $15 million in general obligation bonds to fund a variety of capital improvement projects for both the Town and School District, including street safety improvements, stormwater management systems and school security upgrades. The Town received 16 bids with the lowest bid having a True Interest Cost (TIC) of 3.04%, which town officials said was the best-available rate at the time of sale, and an excellent indication of the Town’s strong financial position and AAA status.
In preparation for this sale, Standard & Poor’s (S&P) as well as Moody’s Investors Services recently assigned updated bond ratings to the Town. West Hartford’s “AAA” bond rating was reaffirmed by S&P, a rating the Town has held since 1974. The “AAA” long term rating reflects S&P’s view of West Hartford’s strong and diverse tax base; strong budgeting framework and imbedded financial policies and practices; and consistent budgetary performance over the past decade and maintenance of very healthy reserves and liquidity. S&P also cited 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 as a positive.
The Town’s second rating agency, Moody’s Investors Service, assigned an Aa1 issuer rating to the Town following a review that was initiated in November 2022 in conjunction with a release of a revised Cities and Counties rating methodology. Moody’s cited the Town’s financial ratios as being lower than typical but stable. Specifically, the Town’s General Fund Balance ratio is 9.2%, which is lower than the 15% Moody’s now requires “Aaa” communities to maintain. Town officials noted that the updated Moody’s rating had no impact on the strong rate achieved on its most recent bond sale.
Last week, the Town Council voted to amend the town’s Fund Balance Policy to allocate onethird of future annual surpluses to the Fund Balance, which would move the Town’s ratio closer to 16% over time.
“West Hartford has been the recipient of the highest credit ratings from both Standard & Poor’s and Moody’s for many decades. A distinction that reflects the Town’s strong fiscal management and strong year over year financial positions,” said Mayor Cantor. “And although our unreserved fund balance is 9.2% and growing incrementally, we have unrestricted town wide reserves of 24.4%. 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 by an additional 9% for a pension reserve fund. 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.”
The Aa1 long term rating further reflects Moody’s view of West Hartford’s robust economy highlighted by strong ongoing development; healthy resident income; rapidly growing grand list and a beneficial location within the greater Hartford metropolitan statistical area (MSA); and strong management team that has implemented prudent financial policies and practices.
“The affirmation of our AAA credit rating from Standard & Poor’s is a recognition of our continued sound financial management, and Moody’s Aa1 rating was simply based on Moody’s raising their scoring metrics in certain categories that moved us from a Aaa rating to a Aa1 rating.” said Chief Financial Officer Peter Privitera
“The AAA credit rating from Standard & Poor’s and the Aa1 credit rating Moody’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.
