Photo: Town Treasurer Floyd Carman
On April 14, Belmont once again received the coveted Triple A (Aaa) credit rating from Moody’s Investors Service.
Belmont joins some select company, being one of only 14 Bay State municipalities (out of approximately 350 communities) with a triple-A ranking, including Bedford, Boston, Cambridge, Lexington, Wayland and Winchester.
The reason Belmont continues – now in its second decade holding a Aaa rate – to secure the gold standard of credit ratings is relatively straightforward, according to the official in charge of Belmont’s fiscal health.
“Hard work and solid prudent disciplined financial management is the recipe” for earning the top ranking, said Floyd Carman, the town’s treasurer and tax collector.
In Moody’s view, the rate derived from the town’s strong fiscal foundation.
“The Aaa rating reflects the town’s healthy financial operations and reserve position, a moderately-sized tax base with strong wealth levels and close proximity to New England’s largest employment center, and manageable debt burden. The rating also incorporates aggressive funding of its moderate pension liability,” Moody’s wrote in April.
A municipal bond rating is a measure of the creditworthiness of a town or state, similar to credit ratings for individuals. The better the bond rating, the lower the interest rate.
For Belmont residents, maintaining the top rating will be crucial as the town moves closer to renovate and building new construction at Belmont High School and other debt-heavy capital projects in the near future.
“Maintaining this rating through the [High School] financing timeline of fiscal 2019-2021 is important,” said Carman.
“The financial benefits depend on the interest rates and reoffering premium payments could save the town $2 million over 30 years.”
While Moody’s forecasts Belmont’s fiscal future as being “stable” over the near term, it points out factors that could lead to a downgrade including:
- Multi-year trend of operating deficits resulting in reserve declines,
- Substantial growth in the debt burden, and
- Failure to address long-term liabilities.