City’s improved financial position, restoration of reserves, growing economy, elimination of school deficits, sound budgeting, and pension-OPEB reform are major factors in rare two notch upgrade.
Pawtucket, RI: Pawtucket Mayor Donald R. Grebien today announced that the City’s bond rating has been upgraded two notches to A3 from Baa2 by Moody’s Investor Services. The upgrade comes after a thorough review of the City’s financial and managerial operations by the rating agency earlier this month in connection with Moody’s regular surveillance review of Pawtucket. The upgrade is expected to result in a lower cost of borrowing for the City on future debt. This upgrade to A3 rating by Moody’s is the second A-rating the City of Pawtucket has been granted by its rating agencies this year, both for the first time in more than five years.
“I am very encouraged that Moody’s has acknowledged the City’s improving financial position with this bond rating upgrade. I thank the many hardworking members of our City and School Department teams who have collaborated to restructure our short- and long-term operating costs to create a more sustainable system for the taxpayers of our great city. While we meet this positive news with enthusiasm, the credit opinion also reminds us that we have much work left, particularly with managing our long-term obligations like our pension and other post-employment benefits,” said Mayor Grebien. “Moody’s decision to upgrade the City’s bond rating recognizes the consecutive years of improvement we have made together. This is yet another signal that we are moving in the right direction. Now, we have to build on the strong foundation we have laid with the City Council and School Committee. The taxpayers of Pawtucket have my continuing commitment that this administration will focus on improving service and operating more efficiently to ensure our bond rating continues to improve, which will lower our borrowing costs.”
The Mayor was joined in the presentation to Moody’s by Director of Administration Antonio J. Pires, Finance Director Joanna L’Heureux, Deputy Finance Director Jeannine Bourski, Pawtucket School Department Chief Financial Officer Melissa Devine, and the City’s financial advisor, HilltopSecurities. The Mayor said, “It is thanks to the diligent work of our team, led by the Director of Administration and Finance Director, that our strong resume for an upgrade was built and that we were able to make such a comprehensive presentation to Moody’s. The preparation showed a complete picture of the City’s progress and how we plan to maintain this success moving forward.”
The Moody’s report listed a number of rating drivers that helped result in the upgrade, including, but not limited to, the following: Pawtucket’s continuing effort to rebuild its reserves, the elimination of years’ worth of school deficits, consecutive years of improvement in the operating fund, sound budgeting practices, and pension and OPEB reforms. According to Moody’s, the City’s “Management has demonstrated sound and conservative budgeting practices in recent years leading to the improved fiscal health of the city.”
Finance Director L’Heureux added, “The rating upgrade credits our strong management practices, improved financial position and the elimination of the school deficit a year ahead of schedule. The rating also acknowledged recent pension and OPEB reforms. Sticking with our funding improvement plan, fully funding our ARC, and building our new OPEB trust will be key components of maintaining the real progress we are making financially, with a lot more to do.”