Office of Mayor Domenic J. Sarno
SPRINGFIELD RECEIVES DOUBLE BOND UPGRADE FROM STANDARD AND POOR’S RATINGS SERVICES
Standard and Poor’s Rating Service issues first ever AA- bond rating to the City of Springfield
January 28, 2014 -Springfield, MA- Mayor Domenic J. Sarno, CAFO Timothy J. Plante and the City of Springfield’s finance team have been notified by Standard and Poor’s Ratings Services that the City of Springfield’s long term rating has received a double bond upgrade; The City of Springfield has been upgraded to AA- from A.
Standard & Poor's Ratings Services raised its issuer credit rating (ICR) on Springfield, Mass.' general obligation (GO) bonds to 'AA-' from 'A' based on our released Sept. 12, 2013. The outlook is stable.
Mayor Domenic J. Sarno stated; “Faced with the worst economy since the great depression, natural and man-made disasters; the Sarno Administration continues to solidify the City’s fiscal foundation. I am extremely proud of our whole financial team headed by CAFO TJ Plante” Mayor Sarno further stated “Our goal will continue to be efficient, effective, and compassionate delivery of City services as we move our Springfield forward.”
S & P cited the following factors in increasing the City’s credit rating:
Strong budgetary flexibility, with available reserves above 8% of general fund expenditures;
Very strong liquidity providing very strong cash levels to cover both debt service and expenditures;
Very strong management conditions led by formalized financial policies and an experienced and capable management team; and
Very strong debt and contingent liabilities position, mostly reflecting the city's rapid amortization and low debt burden, which is being offset by sizable pension and other postemployment benefits (OPEB) liabilities.
Weak economy, with lower wealth and incomes, but that is considered broad and diverse;
Adequate budgetary performance due to costs related to rising pension and other postemployment benefits, as well as subsidy from general fund to trash enterprise fund;
Chief Administrative and Financial Officer TJ Plante stated; “This is a tremendous accomplishment for our City and demonstrates our commitment to our strict financial policies. This is considered a double upgrade represents because it jumped two notches on the bond rating scale and demonstrates that Standard and Poor’s believes so strongly in our financial management and ability to make difficult decisions to balance our budget. I am happy to report that we as a City have not only taken ownership and accountability for our finances, we did so while grinding out the great recession and maintaining vital services.”