S&P Global Ratings affirms town’s excellent bond rating

(Editor’s Note: The Town Manager’s Office issued the following press release this week.)

Town Manager Scott Crabtree announced that S&P Global Ratings assigned an AA+/Stable rating to Saugus’ $5.7 million in general obligation bonds this year, in addition to affirming the town’s AA+/Stable long-term bond rating for outstanding debt. AA+/Stable is the best bond rating that Saugus has achieved under any administration in town history.

S&P Global Ratings, a renowned municipal credit rating agency, explained in its report earlier this year that the town’s “general creditworthiness is characterized by comprehensive and forward-looking management practices, consistently balanced-to-positive operations, and strong reserves.”

AA+/Stable is the second highest bond rating tier that S&P Global Ratings designates for municipalities. Grading the Town of Saugus AA+/Stable signifies S&P’s expectation that the town will maintain its strong budgetary performance and very strong financial reserves.

According to S&P Global Ratings, the AA+/Stable bond rating reflects the agency’s view of the town’s:

• Ongoing development and new growth opportunities
• Track record of positive operations expected to continue this fiscal year, driven by stable operating revenue from property taxes and intergovernmental sources, and expected maintenance of very strong reserves and liquidity
• Cautious budgeting practices and monthly review of budget-to-actual reports; long-term forecasting and comprehensive five-year capital planning; a conservative debt policy in relation to debt service of operating expenditures; robust investment and reserve policies; steps to mitigate cyber risk; and a strong institutional framework

Town Manager Crabtree was pleased that S&P Global Ratings continues to affirm the town’s AA+/Stable bond rating, which helps the town achieve better borrowing rates and yields budgetary savings that can be reallocated to other town services and infrastructure improvements that benefit residents. “This is great news that a reputable credit rating agency has acknowledged the steps the town has taken to make sure taxpayer dollars are being utilized wisely in a fiscally-prudent manner,” Town Manager Crabtree said. “The continued AA+/Stable bond rating is a direct result of the commitment from the town, Finance Committee, Board of Selectmen and Town Meeting to developing and maintaining sound budgetary practices that are supported by strong reserves.”

Selectman Jeff Cicolini said the town’s ability to maintain an AA+ bond rating during these trying economic times is a true testament to the town manager’s effectiveness and the entire administration’s commitment to fiscal responsibility. “Our taxpayers can rest easy knowing Saugus continues to remain on stable footing which allows us to keep the cost of borrowing low, which in turn eases the burden on the need for additional tax increases,” Selectman Cicolini said. “Having a AA+ bond rating is not something that should be overlooked. It is the second highest rating a community can achieve and is the highest Saugus has been rated since the town has participated in the creditworthiness rating system. Hats off to our town manager and his finance team for continuing to apply the conservative budgeting mechanics and fastidiously monitoring our costs across all departments. The results are a financially stable and fiscally strong community.”

“This is great news for the town and our residents,” said Board of Selectmen Chair Debra Panetta. “The better our bond rating is, the more funding that can be used for important projects that benefit the community, as opposed to going toward interest obligations. Kudos to the administration for establishing and embracing prudent fiscal measures that have been rightfully commended by S&P Global Ratings.”

“Once again S&P Global has AFFIRMED the town’s AA+ rating and specifically makes note of the administration’s strong budgetary performance, very strong budgetary flexibility, very strong liquidity due to its strong liquid reserves, along with good financial management,” said Saugus Finance Committee Chairman Ken DePatto. “This report reflects the good financial practices of the administration as supported by the Finance Committee and Town Meeting. This has all been accomplished in an economy that has been stressed by inflation. But our town continues to be solid financially and S&P Global has rewarded the town with its AA+ rating, which will continue to save the community money in interest on all of our borrowing projects.”