FILE
Ansonia Mayor David Cassetti
Bonds issued by the City of Ansonia are a stable investment, according to a report from Standard and Poor’s.
In a prepared statement, Mayor David Cassetti said the S&P report comes “at a time when many Connecticut municipalities as seeing their ratings lowered.”
“Standard & Poor’s reaffirmation speaks to the strength of Ansonia’s finances, dynamic management, and conservative budgeting practices,” the mayor said.
The analyst who wrote the report also said the city should replenish some of the money it has taken from its reserves to maintain that outlook going forward.
“Should the city’s budgetary performance decline, resulting in deterioration of reserves, leading to additional declines in budgetary flexibility or a decline in economic indicators, we could lower the rating,” the report says.
Bond ratings are indicators of fiscal health. Cities and towns with high bond ratings pay lower interest rates when borrowing money.
That’s important for Ansonia, which is preparing to borrow millions of dollars to move its police station and for other improvements approved by voters in a 2016 referendum.
Ansonia’s rating is AA, according to the report from Standard and Poor’s, a credit rating agency.
The AA rating puts the city between two of its Valley neighbors — Seymour, rated AA+, and Derby, which saw its rating lowered to AA- recently.
Ansonia’s bond rating was was upgraded in August 2016.
In affirming the AA rating, the S&P report cites Ansonia’s strong financial management and budgetary flexibility, as well as its good financial policies as reasons for the rating.
The report is posted below. The article continues after the document.
Ansonia CT – S&P Rating Report January 2018 by The Valley Indy on Scribd
The report notes some areas of concern, such as the city’s 3 percent budget deficit last year.
In addition, the city has drawn down its reserves for several years to keep the property tax rate stable.
That’s OK, the report says — as long as the city’s reserves stay within 8 to 17 percent of its annual spending.
It’s getting close.
Earlier this month the Aldermen voted to take $943,000 from reserves, aka the fund balance, as part of $1.4 million in adjustments made to the budget to take into account fluctuations in state aid.
That’s in addition to $3,490,000 Aldermen took from the fund balance while initially setting the budget last June.
Rich Bshara, the city’s comptroller, told the Aldermen this month that with the recent adjustments, the reserves now stand about $5 million — or about 8.1 percent of spending.
He said he hoped the city would end the fiscal year June 30 with a surplus which would allow money to be put back.
The author of the S&P report, Steven Waldeck, said that taking from the fund balance in the middle of the year is unusual.
But he’s not ringing any alarm bells yet — assuming the city is able to replenish the fund balance come the end of the fiscal year in June.
“It is a little bit different when we do see them do it in the middle of the year,” Waldeck said. “That is a risk, but we wouldn’t view that as a negative until we see how they finish and close the year.”
Cassetti said he hopes to return the city’s reserves to at least $5.5 million at the end of June.
Since Cassetti took office in 2013, the city has taken about $8.5 million from the fund balance to prevent tax hikes.
The mayor and his advisers said the plan was to use that money to keep taxes flat until a revaluation of the city’s real estate took place last year, in the hope that the city’s grand list would increase enough to make further borrowing unnecessary.
The results of that revaluation are still being tabulated, but the mayor estimated that the grand list will increase at least $85 million to $90 million when finalized.
That would give the city crucial fiscal breathing room. A $90 million bump in the grand list would give the city about $3.3 million more in tax revenue if the tax rate stayed the same.
Or the city could cut the tax rate to reflect increased property values.
Cassetti said Thursday he couldn’t make any promises yet regarding taxes or the fund balance for next year’s budget.
“It’s still early,” he said.
But the mayor said one thing is clear — the grand list is growing in “leaps and bounds.”
He said that’s a validation of his administration’s strategy, reaffirmed by the S&P report.
“The finances of our city are rock solid,” Cassetti said. “We’re heading in the right direction, with our grand list growing, and we’re optimistic that it’s going to continue to grow.”
