East Haven’s Strong Credit Rating For Borrowing Reaffirmed

EAST HAVEN, CT - Mayor Joseph Maturo, Jr. announced that, in connection with East Haven's sale last Thursday of general obligation (GO) and refinancing bonds, worldwide credit agency "Standard and Poor's" has reaffirmed the Town's "A+" credit rating. In conjunction with the reaffirmation, the rating agency also assigned a "stable" outlook to the Town's rating future, citing a number of favorable financial factors.

Maturo explained, "Yesterday, our bonds sold and traded within a percentage point of the federal government, an incredible financial feat for a town of our size that speaks volumes about the financial progress we've made since I resumed office in 2011. As a result of our conservative, responsible fiscal policies, our community borrowed yesterday on some of the best terms in the Town's modern history, saving the Town precious dollars and helping us keep taxes low and stable."

Finance Director Paul Rizza added, "This was likely my most successful bond sale in my twenty-five year tenure with the Town."

In reaffirming the Town's "A+" long-term credit rating, Standard and Poor's cited a number of favorable factors including the Town's:

• "Strong economy;"

• "Strong budgetary performance, with balanced operating results in the general fund and a slight operating surplus at the total governmental fund level in fiscal 2017;"

• "Very strong liquidity, with total government available cash at 8.4% of total governmental fund expenditures;"

• "Very strong debt and contingent liability position."

Maturo continued, "As of July of 2019, the Town's debt will stand at a modern historic low of approximately $22.2 million, a reduction of 53.7% from the crippling $48.1 million dollars in debt the Town was carrying just seven years ago. Based on the Town's current repayment schedule, we are on pace to eliminate 72% of our remaining debt in the next ten years."

Maturo added, "By eliminating debt, we will continue reducing our yearly debt service payments, allowing us to keep future budgets balanced and, with a little luck, helping us to reduce or at least maintain our mill rate."

In reaffirming the Town's credit rating, Standard and Poor's contrasted the Maturo team's strong fiscal policies with those of prior administrations, noting that the Maturo administration "has put into place stronger financial controls and oversight, which have improved budgetary performance, reserves, and overall management conditions." Since 2011, the Town has earned two bond rating increases - from "BBB+" to "A-" in 2014 and from "A-" to "A+" in 2016.

Maturo said, "Since I resumed office in 2011, the Town's fund balance, or rainy day fund, has grown from just $201,000.00 dollars in 2011 to a healthy $5.84 million dollars as of 2018, an increase of almost 2,900%. Over that same period, we've balanced seven budgets in seven years and maintained a nearly stable mill rate. In light of our strong fiscal performance, investors no doubt see East Haven as a safe, reliable investment."

In its report, Standard and Poor's indicated a willingness to raise the Town's credit rating in the future if the Town continued to improve its budgetary flexibility and increase its fund balance. Mayor Maturo indicates the Town is up to task.

Maturo concluded, "We're proud of our A+ credit rating, but we want to do even better for our residents and our community. Moving forward, we will continue striving to reduce our debt, increase our savings, and build our grand list so that we can make a future case for another credit rating upgrade. At the same time, we will remain critically focused on keeping taxes stable so that East Haven remains an affordable community to live, work, and raise a family."