For Immediate Release: 10/27/2009 3:18 pm
Worcester, MA (October 22, 2009) - The City's bond ratings are the equivalent of a credit rating for a consumer and are "arm's length" - top-to-bottom reviews of our core services, finances, practices, reforms, community stability, tax base, jobs, housing, etc. The ratings are viewed by investors, developers, lenders, businesses, potential residents and citizens as an independent assessment of the health, stability, vibrancy and vitality of our City and its government.
I am most pleased to inform you that our hard work and commitment to reform have once again been recognized by three independent bond rating agencies. All three bond rating agencies - Moody's Investor Services, Fitch Ratings, and Standard and Poor's - have maintained the City's Bond Ratings at A3, A and A-, respectively. It is important we recognize these stable ratings the context of a global, national and regional economic crisis, the collapse of the national and the regional housing markets, the dramatic reduction of our State aid to date (and more anticipated), and other negative forces at work.
In this context, these ratings are great news and an affirmation of our ability to work together, stay on the course of long-term fiscal planning and adapt when and where required - all guided by the Five Point Financial Plan. Also, please keep in mind the global economic crisis has also resulted in credit-tightening and an overhaul of financial regulations, to include how bond rating agencies assess communities. Creditworthiness is now subject to even stricter standards.
We all recognize these are indeed challenging economic times. We continue to stabilize and preserve our core services, to reinvest in infrastructure and to rebuild reserves even within the context of a global, national and regional economic crisis. This requires difficult decisions, significant reforms and living within our means. All three bond rating agencies cite our strong management, our ability to adapt, and our significant reforms as key factors in their decisions. These agencies also cited our due diligence and commitment to the Five Point Financial Plan over the last six years (which included reserve-building and reality-based budgeting) as strengths:
Moody's: "The A3 rating incorporates management's commitment to implementation of its five-point financial management plan to establish long-term financial stability and enhanced reserves, anticipated medium-term expansion in the city's substantial economic base, which is anchored by multiple health and higher education institutions, and the above-average debt position which is expected to remain elevated for the medium term."
Fitch: "The ‘A' rating reflects Worcester's prudent financial management, which is evidenced by officials' prompt action to address budgetary imbalances; modest reserve levels; and a stable employment base anchored by higher education and health care institutions."
S&P: "The ‘A-/Stable' rating also reflects what we view as Worcester's diversifying local economy, which continues to shift to the service sector from manufacturing and benefits from the presences of 10 colleges and universities and a strong health care sector."
Our team spent countless hours preparing for these reviews and met with these agencies over the course of two days dedicated solely for this purpose. We prepared and delivered a thorough and compelling presentation of our strong operational/financial management and accomplishments - from our early actions to address State Local Aid cuts to our ongoing efforts to build-in reforms as part of our long-term solutions. We highlighted our ability to preserve, and in many cases, improve core services through technology and consolidation; and we spoke of the bold gestures and actions delivered to move the City's economic development agenda forward despite the collapsing economy. We were candid and presented the real challenges on the horizon - and focused on our time-tested ability to identify these early on and to adapt as required.
I am grateful to the preparation and the efforts of Assistant City Manager Julie Jacobson, Chief Financial Officer Thomas Zidelis, City Auditor James DelSignore, Director of Human Resources Kathleen Johnson, Budget Director Jarrett Conner, and Media/Communication Director Christina Andreoli, as well as Lisa Dickinson and Kim Pare, of Unibank Fiscal Advisors, Inc. - for these presentations and detailed follow up information responses. I would also like to thank the members of my Cabinet and all our City employees for the body of work that resulted in these stable ratings - rising to the challenge and pushing for progress in spite of adversity. Finally, I am most grateful to you, the Worcester City Council, for your collective efforts, guidance, tough decisions and support that allow us to continue to navigate through these trying fiscal times. It is truly all about team.
Michael V. O'Brien
Worcester City Manager
