BRIDGEPORT — City officials — and taxpayers — received some good financial news this week, with two of the three key credit rating agencies raising Bridgeport’s ratings.
The news also comes as Mayor Joe Ganim prepares to run for a third consecutive two-year term in 2023.
In his latest reviews of Bridgeport’s finances, Fitch raised the city’s rating from A to A+ while Moody’s Investors Service also moved the needle a notch from Baa1” to A3. The highest rating that can be achieved is AAA.
Meanwhile, the third largest rating agency, Standard & Poor’s, kept its outlook on Bridgeport’s finances stable at A.
All of this may sound like gibberish to some residents, but it could ultimately hurt their wallets by potentially saving Bridgeport millions of dollars in long-term interest payments when officials borrow for big projects like school construction .
“This is an affirmation of the strength of the city’s finances, fiscal health, and this change will lead to reduced interest costs for our bond (loan), thereby saving taxpayers money,” said the director of finance Kenneth Flatto to council budget committee members. week
It also said it was the first simultaneous increase in ratings “in decades.”
“With a better rating, the city can go out and borrow on better terms, to get better (interest) rates on the loans,” Councilman Scott Burns, co-chairman of the budget committee, said in an interview Thursday.
That affects the annual city budget and the amount of taxes officials must collect — the 43.45 tax, or Bridgeport’s mill rate. it is among the highest in the state — to cover operating expenses and long-term debt.
“If the city is showing that it’s fiscally responsible, I would say investors will be more likely to say, ‘This is a place we want to invest,'” Burns said.
Meanwhile, the investment helps the local economy by growing the tax base and easing the burden on existing homeowners and businesses.
Fitch in a statement credited its “one-point upgrade” to the continued improvement in the city’s “financial flexibility since fiscal 2012 and increased reserve levels.” Mayor Bill Finch took office in 2012, with fellow Democrat Ganim defeating him in a 2015 primary and winning that year’s general election.
“The update also reflects a marked improvement in the outlook for revenue growth from rising tax base values and changes in state law that support the recurring increases in state aid that began during the fiscal year 2022,” Fitch’s statement continued.
Similarly, Moody’s cited a “solid and continued financial improvement highlighted by a material increase in cash and reserves.
“We anticipate that the effective budget management that led to these changes will remain in place and continue to produce moderate but consistent operating surpluses,” Moody’s said in the statement.
But that same release also noted that while Bridgeport is “an employment hub for the area,” residents have “weak” and “below average” incomes compared to many nearby communities, and the “passive long-term highs in local government continue to weigh on the rating and drive.” high but manageable fixed costs.”
These liabilities are highlighted by employee retirement expenses.
In 2018 and 2019, some elected officials and business leaders, concerned about Bridgeport’s financial outlook and then the 54.38 tax rate, called for a state takeover of the budget. But Flatto fought it at the time.
“The city is in very healthy financial shape,” Flatto said during a council hearing on the matter in August 2019.
Burns said this week that Flatto, who helped Ganim get elected in 2015 and was later hired to lead the finance department, “deserves a lot of credit” for the new bond ratings.
“He’s been pretty smart and taken opportunities to reduce our long-term debt and level out our payments over time, working with the board,” Burns said.
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