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06/19/2019 12:00 AMMayor Joseph Maturo, Jr., announced June 18 that Moody’s Investors Service has awarded East Haven its third credit rating upgrade since 2014, raising the town’s bond rating from A3 to A2.
“East Haven is one of the only municipalities in the state to earn three bond rating upgrades in the last five years,” Maturo said. “This latest upgrade further validates the fiscal policies of this administration, which have produced eight straight budget surpluses, historically low debt, and the town’s largest rainy day fund since 2007.”
In 2014, Standard and Poor’s raised the town’s credit rating from BBB+ to A-. In 2016, Standard and Poor’s awarded the town a two-tier credit rating upgrade from A- to A+. The current upgrade by Moody’s Investor’s Service, from A3 to A2, marks the third credit rating upgrade for Maturo and the Town of East Haven in the last five years.
Maturo added, “Our rainy day fund presently stands at a healthy $5.8 million. Our long term debt is down over 50 percent from its peak of $48.1 million in 2011. Finally, even with the conservative fiscal controls we’ve implemented, we have invested over $12.6 million into our infrastructure since 2012, including $1.8 million for new roads and sidewalks across town. We have become a fiscal model for others in the region over the past eight years and this latest credit rating confirms that our conservative budgeting and borrowing practices have drastically improved the town’s financial position and economy.”
In raising the town’s credit rating, Moody’s cited several credit strengths including: the town’s “significantly improved financial position”; the “improved financial standing of [the town’s] Self-Insurance and Workers’ Compensation funds”; a “Favorable Supreme Court ruling on long-standing litigation;” and the town’s “Multi-year reduction of [its] debt burden and annual debt service.”
In summarizing the town’s operations under the Maturo administration, Moody’s noted that “[t]he town’s positive operating performance over a multi-year period has significantly improved its fund balance and cash positions.” The company further noted that “[a] key element of the town’s improved operating profile has been the steady decline of its annual debt service.”
According to Moody’s analysis of the Town’s debt profile, the Town’s yearly debt service was $7.1 million, or approximately 9% of its operating budget in 2010. In 2018, the Town’s debt service had been drastically cut down to 3.2 million, or about 3.3% of its operating budget.
Maturo explained, “Residents can understand how impressive this is if they just imagine the financial freedom they’d enjoy by the cutting their mortgage payment in half. Since 2010, we have cut the Town’s mortgage payment by a whopping 54.9%. As a result, we’ve enjoyed great financial freedom. In 2015, we enacted the largest tax decrease in a non-revaluation year since 1989. This past year, we offered another modest tax reduction. We’ve streamlined government, eliminated waste, and reduced our debt, which has kept our mill rate low and stable.”
Maturo continued, “With our debt and our credit firmly under control, we are continuing to aggressively address the Town’s capital and infrastructure needs. This year, in addition to another extensive capital program, we are rolling out a $7.2 million dollar energy efficiency upgrade program which will fund improvements to Town and Board of Education buildings across Town. The savings from the program will finance the bonding to undertake the improvements, which means the initiative will be revenue neutral and have no effect on our mill rate or bond rating.”
Maturo concluded, “Since 2011, my team and I have made some very difficult, and sometimes unpopular, financial decisions. However, in doing so, we have revitalized our budget, stabilized our tax rate, and significantly reduced our long term debt. It is encouraging that credit rating agencies like “Moody’s” and “Standard and Poor’s” have recognized our efforts, validated our policies, and awarded us several credit rating upgrades. We are on the right track. However, given the State’s dismal fiscal climate, we must remain committed to our conservative financial game plan. Moving forward, my team and I will do everything possible and necessary to ensure we stick to that game plan so that we can keep East Haven an affordable place to live, work, and raise a family.”