BRISTOL - The city has received the highest possible bond rating for a municipality based on the city’s management and financial stability.
According to Bristol Comptroller Glenn Klocko, the high rating means the city is less of a financial risk and will pay a lower interest rate when selling bonds to finance major projects.
“The city plans on selling $21 million worth of bonds next week,” said Klocko. “The market changes daily, so we don’t know what the rate will be.”
“This rating will save our citizens thousands of dollars because our rate of borrowing to operate the city will be lower,” Klocko added. “We have managed our debt extremely well while funding our pension plans nicely. Our diverse tax base is another key factor for the favorable rating.”
After previously being rated “AA+,” Bristol upgraded to the highest “AAA” rating by New York-based Fitch Rating Inc. for the city’s healthy financial profile, low debt levels, strong management of long-term obligations and mixed socioeconomic indicators.
“Fitch takes a look at management, the mayor, comptroller and the staff that is knowledgeable and experienced,” said Klocko. “They also looked at how we changed the five-year capital improvement plan to a 10-year plan.”
The report conducted by Fitch stated that Bristol has ample revenue raising capacity and that property taxes make up more than half of the general fund revenue.
The top 10 taxpayers consist of different retail, utility companies, Lake Compounce and ESPN, which has the largest share. Together they make up 12 percent of the city’s taxable assessed value.
Bond ratings are similar to a person’s credit score but reflect the fiscal strength of the city and used to pay for large-ticket items and municipal infrastructure. They affirm the expectation that the city will maintain strong reserve levels and a high rating, because of its unlimited taxing authority.
According to Klocko, Bristol has been rated by two other rating companies; Moody’s, which gave the city the third highest rating and Standard and Poor’s, which awarded the second highest. Both companies will be giving out new ratings at the end of next week.
“Our team led by comptroller Glenn Klocko worked very hard to get the rating last year and never stopped finding ways to ensure we kept this rating. Sound financial analysis and planning are going to benefit everyone in Bristol,” said Mayor Ken Cockayne. “Economic development successes like partnering with Bristol Hospital in constructing a medical complex downtown combined with monitoring the city’s spending and smart investments are positioning the city’s future success regardless of any negative outside factors.”
Klocko explained that he does not expect changes to the rating as Diane Waldron prepares for the position of comptroller upon his retirement and is optimistic that she will continue to maintain a high rating.
“There’s a file waiting for Diane,” said Klocko. “I will go over how we do things with her, and review our practices and our proven track record with rating agencies.”