STANDARD AND POOR’S GLOBAL AFFIRMS NEW BRITAIN’S ‘A+’ BOND RATING
February 8, 2017
NEW BRITAIN—Mayor Erin E. Stewart announced today that S&P Global Ratings has affirmed its “A+” rating for the City’s general obligation (GO) bonds—citing the City’s strong management, an operating surplus, and other solid financial policies.
S&P Global Ratings, a subsidiary of S&P Global Inc., also affirmed the City’s GO bond outlook as “stable.” In January 2016, Standard and Poor’s upgrade the City’s bond rating to “A+”—the City’s highest bond rating from the agency since 2008.
“We are fortunate that rating agencies continue to recognize the positive changes taking place inside and outside of City Hall to make us stronger financially and to continue growing development,” said Mayor Stewart. “Difficult decisions lie ahead, but we are in a better position now than several years ago to meet uncertain challenges in the future.”
In its report, S&P Global cited several areas that led to its “A+” designation:
- Strong management with good financial policies
- Strong budgetary performance, including an operating surplus in the FY 2016 budget
- Steady employment growth and a growing tax base
- Investments by the City in its infrastructure
The rating agency noted that continuing employment growth, the City’s ongoing streetscape projects, and a growing and diverse tax base, have aided in improving the economic outlook of New Britain. S&P referred to the city’s management as “strong,” citing financial practices like maintaining a fund balance that amounts to at least 5 percent of the City’s expenditures. S&P also highlighted the City’s use of historic trend analysis and officials’ use of zero-based budgeting.
Some of the cost-savings measures undertaken by the City over the last three years that S&P highlighted included significant reductions in spending, the elimination of vacant positions, and moving labor unions to high-deductible health plans, which will save the City around $6 million over the course of the contracts.