Town Administrator Mel Kleckner is pleased to announce that the Town of Brookline once again has received the highest possible bond ratings from two top credit rating services.
Standard & Poor’s has affirmed Brookline’s AAA rating, while Moody’s Investors Services again issued the town an Aaa rating. The ratings reflect the town’s consistent combination of strong financial conditions and very low credit risk. The ratings will apply to general borrowing, as well as approximately $168 million in new bonds approved by the town, which will finance for school capital needs, and general town capital needs including water system improvements.
The exemplary ratings mean that the town can secure a lower interest rate on bonds, reducing the cost to taxpayers.
“Our bond ratings are a reflection of the planning and dedication of our financial management team,” Town Administrator Kleckner said. “The COVID-19 pandemic has challenged cities and towns across the Commonwealth. We are happy that S&P and Moody’s are confident in our approach. We feel the town is in a solid financial position moving forward.”
S&P and Moody’s both cited the town’s solid financial picture, including:
A very strong local economy that is projected to continue to grow. A very strong local management team with a long track record of strong financial policies and practices. Strong budgetary performances amid the COVID-19 pandemic. Budget flexibility. A predictable local revenue stream, with successful property tax collections exceeding 99 percent. The willingness of residents to override the tax limits set by Proposition 2 ½ for important projects. S&P indicated it does not intend to revise the town’s rating during the next two years.
Both agencies note a potential weakness in the town’s obligations to pensions and other post-employment benefits (OPEB), which are not fully funded. The S&P report adds, however, that the town made its full required pension contribution in 2020 and is on track to meet the state’s requirement of a fully funded pension system by 2040.
Moody’s indicated an expectation that the town’s unfunded pension and OPEB liabilities would remain manageable given the town’s long-term commitment to fulfilling its obligations.