NEWBURY — The town’s bond rating was recently upgraded to AAA, the highest available, allowing the town to borrow money at the lowest interest rates.
“We are now a AAA community,” Town Administrator Tracy Blais told selectmen. Blais said she was proud of the fiscal achievement and what it says about the professionals working alongside her in the Finance Department.
“Making the move to AAA — especially from where we started — is a monumental task, which is why I take such great pride in this accomplishment,” she told town leaders. “When I arrived in Newbury, we had a negative free cash balance of $130,659 and no other reserves to speak of.”
The free cash account was recently certified at $2.8 million.
In addition, a recent tax-and-foreclosure public auction brought in $848,000.
After factoring in the back taxes owed on the 19 parcels, a balance of $483,747.83 will become a component of next year’s free cash certification.
Bond ratings rank the credit worthiness of a municipality or other entity and how likely it is to pay back its debts.
The credit rating agency Standard & Poor’s, which issued Newbury’s recent upgrade, views AAA communities as having demonstrated an “extremely strong capacity” to meet financial obligations and a low risk of defaulting.
“This rating not only signals that the town’s bonds are a safe investment, it also translates into a savings to taxpayers as the highest-rated communities borrow funds at the lowest interest rates,” Blais said. That is key, she told selectmen, because the town will soon be issuing bonds for a new police station and possibly a town hall project.
Blais said that this week the town sold its bonds for the police station project for a winning bid of 2.4957%. The Municipal Building Committee had projected a 4% interest rate on the debt service payments.
In announcing the higher bond rating, Blais cited the “tireless efforts” of Town Accountant Eileen DeVeau and Executive Administrator Ellen Jameson, who provided data and helped organize the presentation Blais made to Standard & Poor’s.
Blais also recognized selectmen’s leadership in supporting policies and initiatives that she said have served the town well.
Since starting as town administrator, Blais has spearheaded the adoption of policies or programs for investments in 2013; other post-employment benefits, 2015; the pavement management program, 2016; financial management policies, 2017; the capital improvement plan, 2018; the financial forecasting model, 2018; and the recent police cruiser replacement program.
“Newbury’s fiscal house is in good order; undergirded by a strong foundation of the best practices in financial management,” Blais said.