Moody's Reaffirms West Hartford Bond Rating, Upgrades Outlook

West Hartford officials learned Tuesday that the town has retained its Aaa bond rating, a rating it has earned since the 1970s, Town Manager Ron Van Winkle said.

At the same time as Moody's Investor Services reaffirmed the Town of West Hartford's Aaa bond rating, it also revised the outlook to "stable," an improvement from the "negative" outlook the agency issued in February 2012.

"When Moody's issues a negative outlook, they are required to go back and conduct a review," said Van Winkle. He and other managers, as well as Mayor Scott Slifka, Deputy Mayor Shari Cantor, and Minority Leader Denise Hall spent hours meeting agency representatives, discussing West Hartford's methods of dealing with storm related expenses as well as pension reserves and other issues.

"We were worried because we are a developed community and they like to see good growth," Van Winkle said. He thought there was a possibility Moody's would either reaffirm the negative outlook, or even drop the rating to Aa, as it recently did for the City of Stamford as well as for the United States.

Following the review, Moody's determined that the town is strictly controlling expenditures and adhering to fiscal policies to a degree that its financial position will remain stable, despite below-average reserve levels.

"I was delighted to see how they felt about us. Really I am beyond delighted," said Van Winkle about the agency's appreciation for the way the town handled unexpected costs associated with several major and unprecedented storms.

Standard & Poors, which gave West Hartford its highest (AAA) rating in 2012, will not issue another rating until the town prepares to sell bonds again. Van Winkle said that will likely take place in late fall or early winter.

He anticipates that the town will continue to receive an excellent rate for future bond sales, "as affirmation of our good financial practices."

The following information was provided in a press release: 

In fiscal 2012, the Town was faced with approximately $11.9 million in unanticipated clean-up costs related to an October 2011 snowstorm, which was expected to significantly erode the town’s reserve position. The town received approximately $8.7M in FEMA reimbursement (75% of total cost), and utilized $1.9 million of bond premium to fund the majority of the clean-up costs. In addition, the Town recognized $794,000 in favorable revenue variances and $236,000 in unspent budgetary appropriations due to a freeze on all discretionary spending. At year end, the Town’s total General Fund balance saw a decline of approximately $356,000, falling to $18.4 million, or an adequate 7.5% of revenue, net of FEMA receipts. Although the Town’s fiscal 2012 General Fund balance as a percent of revenues represented the lowest level since 2008, management’s ability to secure FEMA reimbursement, and prudently manage departmental expenditures, resulted in a more modest deficit than initially projected.