Moody’s Investors Service said today it had assigned a triple-A (Aaa) rating and stable outlook to the Town of Westport’s planned $29.3 million general obligations refunding bond issue and affirmed the top rating to its $106 million in long-term general obligations debt.
It said the bonds, with an expected sale date of May 14, are secured by the town’s unlimited general obligation tax pledge and will be used to refund the town’s series 2003 bonds for an estimated net present value savings of $3.6 million, or 12 percent of refunded principal.
This was the second Moody’s Triple A affirmation for the town in this low interest environment in less than five months. In January, Moody’s gave the same rating to a 20-year $6.99 million general obligations bond issue that went off at 1.9 percent. (See WestportNow Jan. 24, 2013)
The agency said the highest quality long-term rating reflects “Westport’s sizable tax base with extremely high wealth and income indices, and a manageable debt position.”
The rating also “incorporates the town’s well-managed financial operations marked by adequate reserve levels, a well-funded pension system, and proactive funding of the town’s post-retirement benefits liability,” Moody’s said.
“The outlook remains stable, indicating Moody’s expectation that the town’s financial position will remain healthy in the near term.”
The rating agency said Westport’s strengths include “conservative financial management practices which have resulted in a history of satisfactory reserve levels; satisfactory plans to address long-term liabilities for pension and OPEB (Other Post Employment Benefits) and [an] underlying economy [that] is stable benefiting from well above average wealth levels.”
Moody’s said challenges include maintenance of satisfactory reserve levels “amidst rising spending pressures.”
It added: “The outlook is stable reflecting our expectation that Westport’s credit profile will continue to exhibit characteristics consistent with our Aaa rating category.”
Congratulations to Finance Director Gary Conrad. It’s also gratifying to witness the fruits of our labor following the economic crisis. Thank you to my fellow Board of Finance members for working diligently together as a team as we made the difficult and conservative decisions.
I encourage our fellow residents to read the budget PowerPoint presented earlier this week. It may be found here: http://www.westportct.gov/modules/showdocument.aspx?documentid=4901
Avi Kaner
Chairman, Board of Finance
Avi—congrats on refinancing our debt. Glad to see us take advanatge of the very low itnerest rate environment.
Eventually, interest rates will rise. Could happen sooner than most are predicting. Has a study been conducted by Gary Conrad that would show the residents for every 1% increase in interest rates, how much our interest costs would rise?
We have watched as there was little sensitivity analysis done with OPEB, etc., and now burdened with rising costs affecting all residents. Would be good if we could see what happnes when itnerest rates go up and what the eventually effect will be.
Almost scary Dick- you should know the reason why Westport has a AAA rating is due to the ability of the residents to pay our taxes and potentially higher taxes. If the economy turned dwn again and incomes collapsed we would find probably ourselves without the high rating.
As fr saving tax payers money, I don’t remember seeing my taxes go down. In fact, the continue to rise. Every year. Every year.
Lets also not forget the OPEB issue that occurred. Somehow our town controller and finance manager had no control over the benefit nor understood how many in town received it. We have watched as the liability has risen to much higher than $100 MILLION. Who was held accountabe? You on the finance committe? The controller?
What we should be doing is forecasting our interest costs as interest rates rise. It is going to happen, we cannot maintain such low rates in this country. Eventually assists will inflate as Bernacke wants and we will see higher rates.
Before we find ourselves with another OPEB issue, we should do the advance work to understand the effect on taxes as rates rise. Let OPEB teach us a lesson.
And while you are thanking the finance team, please make mention of the residents who really effect our ratings.
During my 16 years on the RTM, Westport has always maintained a Triple A rating. This rating was reaffirmed in 2011, when Moody’s was reassessing many affluent town, following its downgrade of US government bonds. Even during the depth of the recession, our strong credit rating was reaffirmed in 2009. Each time we have been evaluated over the last 16 years, Moody’s has cited Westport’s conservative financial management and strong cash reserves.
Since the recession began in 2008, our Town Controller, Ken Alexander, has managed multiple debt issuings and refinancings to take advantage of low interest rates, thus saving taxpayers money. Working with the town’s financial advisors in preparing presentations to Moody’s, Ken deserves much of the credit for our ratings. We are fortunate to have him and Gary Conrad, our recently appointed Financial Director, as the pillars of our financial team.
Dick Lowenstein, RTM District 5 and member of the RTM Finance Committee