For Immediate Release: 10/18/2012 4:00 pm
Worcester, MA (October 18, 2012) - For the first time in more than a decade and after seven years of reforms, hard work and very difficult decisions, two of the three independent credit rating agencies have upgraded the City or Worcester's municipal bond rating. Standard & Poor has upgraded by two grades from A- to A+ and Moody's from A1 to Aa3 with a positive outlook. Fitch Ratings reaffirmed their rating of AA- with a stable outlook.
Both Standard & Poor's and Moody's cite the city's financial management and operating stability, as well as recent efforts to address a crippling retiree health care liability, as reasons for the upgrades. All three cite the city's robust redevelopment plans and diverse tax base and highlight the construction progress relative to the CitySquare development project, Union Station, North Main area and CSX expansion.
City Manager Michael O'Brien says, "This is a positive signal to investors who hold and purchase our bonds, to potential and prospective developers and business owners and to the residents of our community. We are a solid, long-term investment."
As in years past, our team assembled a stellar two-hour presentation for the three independent bond rating agencies. The presentation included a tour and a video (which can be viewed at http://www.youtube.com/watch?v=5_4oJbz-Heg) about private and public economic development activity underway, presentations by a local investor and business leader and an overview of the city's financials, including our adherence to the Five Point Financial Plan, reserve-building, debt service management and recent reforms. Collectively, we presented a thorough and compelling review of our strong financial management, strategic infrastructure investments, robust development agenda and plan for the future.
These rating improvements are positive affirmation that the last seven years of hard work and difficult, often unpopular decisions were the right decision for the long-term stability and future of our community. Few if any government groups are receiving upgrades at all. Yet, we stayed true to our financial plan — we lived within our means and addressed our budget busters early on to balance our budgets every year. We built-up our reserves and made strategic infrastructure improvements — all while in the midst of the worst economy since the Great Depression.
This is what hard work equates to; it is the difficult work of 'saying no' to the here and now and planning ahead for the long-term. It is smart fiscal management and it is an accomplishment for which this City Council, my Administration and indeed this entire community should take a strong measure of pride. This is a positive signal to investors who hold and purchase our bonds, to potential and prospective developers and businesses owners, and to the residents of our community. We are a solid, long-term investment. We have set a table and a plan of action for additional upgrades for next year.
Here are some snapshots of what our analysts said in their reports:
"I am grateful to the preparation and the efforts of my team, which included Acting Assistant City Manager Kathleen Johnson, Chief Financial Officer Thomas Zidelis, City Auditor James DelSignore, Chief Development Officer Timothy McGourthy, City Treasurer Mariann Castelli Hier, Cable Services Director Judy Warren, and Communications Specialist Colleen Bamford as well as Lisa Dickinson and Kim Pare of Unibank Fiscal Advisors. I would also like to thank the members of my Cabinet and all our City employees for the body of work that resulted in this rating. Finally, I am most grateful to you, the Worcester City Council, for your collective efforts, guidance, tough decisions and support. It is truly all about the team."
