The Town of Westborough is proud to announce that on May 30, 2014, Standard & Poor's upgraded the Town's Bond Rating from AA+ to AAA. Westborough now joins 21of the 351communities in Massachusetts that have attained the highest bond rating given by Standard & Poor's. This is the second bond rating upgrade Westborough has received in the past few years. In 2011, Westborough's bond rating was upgraded from AA to AA+.
Bond Ratings are directly related to the interest rates paid by municipalities when they borrow for various projects. Nationally, the difference between an AA and AAA bond rating is 0.6% on a 20-year debt issuance. As Westborough is currently in process of renovating the Town Hall and building a new Fire Station and will be issuing debt in the near future, the savings estimated in the two bond rating upgrades on an $18 million estimated debt issuance is approximately $1,134,000 over the 20 year debt period.
Standard & Poor's notice included the following reasons for the upgrade:
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• Very strong local economy
• Strong budgetary flexibility with 14.9% in reserves
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• Strong budget performance with consistent operating results (estimates vs. actuals)
• Strong liquidity providing strong cash levels to cover expenses
• Strong management conditions with formal policies and practices
• The Town's contributions toward funding its OPEB liability
James Malloy, Westborough Town Manager stated, "It's great to see positive results of actions the Town has taken over the past few years in establishing formal fiscal and debt management policies and building the Town's reserves and eliminating the practice of using reserves to fund the operating budget. For this to translate into two bond rating upgrades in the past 3 years is excellent news for the taxpayers as it will result in lower interest rates paid on debt the Town issues and is the direct result of the coordination and cooperation between the Town' s management team, Board of Selectmen and Advisory Finance Committee."
Joanne Savignac, Westborough Treasurer/Collector stated, "The Town of Westborough had been considered in the past year for an upgrade, but non-funding of the OPEB account was deemed unfavorable by Standard & Poor's officials. I am pleased that the Town is now able to begin funding and balance its budget without using reserves. A lot of municipalities are not as fortunate as Westborough."
George Barrette, Chair, Westborough Board of Selectmen stated, “The Board is very pleased to have achieved this goal. We thank the voters at last March's town meeting for approving the funding of the budget article which included the OPEB funding that helped reach this milestone. This rating upgrade will help reduce our finance costs as we complete our important renovation projects."
Gary Wells, Chair, Westborough Advisory Finance Committee stated, "The town as whole has been working diligently over the past several years to maintain costs, improve efficiencies, manage our debt and budgets all while undertaking major improvements to our Fire Station and Town Hall without needing to do a Proposition 2-1/2 over-ride to fund these projects. It is this type of fiscal responsibility that has contributed to this rating upgrade."
