Moody’s Investors Service has assigned a Aaa rating to the Town of Wellesley, MA’s $5.6 million General Obligation Municipal Purpose Loan of 2016 Bonds. Moody’s maintains the Aaa rating on $152 million of outstanding general obligation bonds. The outlook is stable. The stable outlook reflects the town’s conservative budgeting approach supported by formalized financial policies that are expected to support balanced operations over the near term. The outlook also incorporates the additional financial flexibility provided by the strong tax base with voter approved debt exclusions and general overrides to Proposition 2 1/2.
The Aaa rating reflects the town’s sizeable and wealthy suburban tax base, well-managed financial position with stable reserve levels, and history of voter approved overrides to the tax levy limitations of Proposition 2 1/2. The rating also incorporates an above-average but manageable debt burden and prudent funding of long-term liabilities.
The majority of the bonds ($5 million), which will finance school, town, and Department of Public Works projects, are secured by the town’s general obligation unlimited tax pledge as debt service has been excluded from the levy limits of Proposition 2 1/2. The remaining $575,000 is secured by a general obligation limited tax pledge as debt service has not been excluded from Proposition 2 1/2.
Factors that Could Lead to a Downgrade:
Trend of operating deficits resulting in a material decline in available reserves
Trend of increasing financial pressure due to unsuccessful votes for tax levy overrides or debt exclusions
Material increase in the debt burden or pension liability
Report card for others in town:
Wellesley College (Aa1 stable)
Babson College (A2 stable).
Also of interest…