Wellesley gets good report card from Moody’s

Moody’s Investors Service has assigned a MIG 1 rating to the Town of Wellesley’s (MA) $8.7 million General Obligation Bond Anticipation Notes (dated June 6, 2014 and payable December 5, 2014). Concurrently, Moody’s has affirmed the Aaa long-term rating on $95.5 million of outstanding bonds. The outlook is stable. The notes are general obligations of the town secured by its limited property tax pledge as debt service has not been excluded from the levy limitations of Proposition 2 ½, except for $390,000, which has been exempt from the levy limit. The proceeds will fund various town and school capital projects.

 The MIG 1 rating reflects the town’s strong long-term credit characteristics, ample liquidity and sufficient management of takeout financing given a demonstrated history of accessing the short-term market for multiple note and bond sales over the past five years.

The Aaa rating is based on the town’s sizeable and wealthy suburban tax base, well-managed financial position with sound reserve levels and history of voter approved overrides to the tax levy limitations of Proposition 2 ½. The rating also incorporates a manageable debt burden and focus on funding of long-term liabilities.

The stable outlook reflects the town’s conservative budgeting approach supported by formalized financial policies. The outlook also incorporates the additional financial flexibility provided by voter approved debt exclusions and general overrides to Proposition 2 ½.

 STRENGTHS

— Wealthy and diverse tax base with favorable location and institutional presence

— Conservative fiscal management aided by formalized policies

— Strong voter support for property tax increases

CHALLENGES

— Rising education costs

OUTLOOK

The stable outlook reflects our expectation that the town will maintain a sound financial position bolstered by the additional operating flexibility provided by debt exclusions and operating overrides to Proposition 2 ½. The outlook also incorporates the sizeable and affluent tax base of the town.

WHAT COULD MAKE THE RATING GO DOWN

-Significant decline in available reserves

-Deterioration of the tax base or demographic profile

– Material increase in the debt burden or pension liability

 

Also of interest…

Wellesley residents vote Yes on override, senior center land purchase

 

 

 

 

 

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