Standard & Poor’s Global Ratings Service (“S&P”) has affirmed the City of New Britain’s “A+” rating on both its new and underlying debt. At the same time, S&P has affixed its top short-term rating of “SP-1+” to the City’s short term debt obligations.
“Once again, Standard & Poor’s – the top rating agency in the nation – has graded our City ‘A+’ to the market at large,” said Mayor Erin E. Stewart. “When I took office back in 2013, we had been downgraded to ‘BBB,’ which was one step above junk bonds. In five years we have not only brought our rating back, but we have been consistently affirmed as being a strong ‘A+’ credit with a ‘Stable’ outlook. That is something in which I, and all of our residents, can take great pride.”
The report from S&P cited several factors contributing to the “A+” rating, including:
“Strong management: We view the City’s management as strong, with good financial policies and practices.”
“Very strong liquidity: In our opinion, New Britain’s liquidity is very strong…In our view, the City has strong access to external liquidity if necessary.”
At several points in their report, S&P cited the fact that the City has spent the past five years returning the budget to structural balance, taking into account many of the difficult – but necessary - decisions that have been made during Mayor Stewart’s administration, including: reducing City expenditures, reducing the size of the City’s workforce, finding or creating efficiencies where possible, hedging against downturns in state aid, hard-nosed negotiating with our partners in labor, close monitoring of expenses, and only raising revenues as a last resort.
“For five years I have made it clear that my first priority was, is, and always will be keeping our City on a path to fiscal stability,” the Mayor continued. “Every day we are working to increase both private and public investment in New Britain, continue the positive growth in our grand list, create an environment that is both attractive and predictable for families and businesses alike, and maintain the number and quality of services we provide to both.
“That’s certainly not to say everything is rosy. Returning a City this size to solvency requires striking a delicate balance day-by-by, month-by-month and year-by-year. Yes, we have made some difficult choices to restore stability and predictability to our finances. But many more tough decisions lie ahead. Whether it’s the uncertainty of a potential recession on the national horizon, or the uncertainty of the state’s financial position - along with a new administration and legislature in Hartford. But I am committed – and I believe our Council is as well – to making those decisions if they will keep us on a course to a brighter future, both in the near term and in the long term.”
Lori Granato, Director of Finance, said, “S&P acknowledges the City’s diligent work in order to meet the necessary services for our residents and our labor force. It’s not easy and involves a lot of difficult decisions. Collaboration continues to be the key so that the city continues to grow and prosper.”
Going forward, S&P stated: “The stable outlook reflects our view that New Britain’s reserves will remain strong, despite projected drawdowns, aided in part by a growing tax base. We also recognize that management has improved its budgetary assumptions over the past several years, which we expect will continue to lead to predictable performance. We do not anticipate changing the rating within our two-year outlook horizon as we believe it is likely that the City’s budgetary flexibility will remain strong and that the City will continue to pursue the goal of structural balance.”