Finances boosted by upgraded bond rating
AMHERST — An improved bond rating means Amherst will have more money to invest in infrastructure and pay lower interest rates for borrowing.
Standard & Poor’s recently upgraded the town’s bond rating from AA to AA+, putting Amherst one step below the highest possible rating.
Town Manager John Musante said the new rating is an acknowledgement that the town’s financial team is doing things well and that it frees up money for other projects.
On Tuesday, the town sold more than $3 million in bonds for capital projects at an interest rate of 2.61 percent.
“For us, it generally means we’ll pay lower interest on the bonds than if we had a lower rating,” said Finance Director Sanford “Sandy” Pooler.
Pooler said the interest rate is higher than it was last year, but is below what he had projected, meaning that the upgraded rating will be a better deal for taxpayers. The $3 million in bonds sold included $2 million for the ongoing water and sewer line work on Pine Street, and $1 million for various other projects, including renovations to Ann Whalen Apartments, purchase of equipment for the Department of Public Works and a new pumper truck for the Fire Department.
Standard & Poors primary credit analyst Timothy Daley in a report attributed Amherst’s change in bond rating to “the town’s strong budgetary performance and strong budgetary flexibility, further bolstered by its strong management conditions.”
Daley also expressed confidence in the town’s leadership: “We believe management will continue to mitigate the effects of Amherst’s long-term liabilities in addition to the town continuing to maintain balanced operations and strong reserves.”
Musante said the new rating reflects Amherst’s budget flexibility, its financial policies and the work done by the Select Board, Finance Committee and Town Meeting.
Among the criteria evaluated were the town’s economy, its being home to the University of Massachusetts, Amherst College and Hampshire College, the high level of municipal reserves, a willingness of residents to raise property taxes and good financial policies and low debt service.
Musante praised the financial professionals and their staffs, including Pooler, Treasurer/Collector Claire McGinnis, Comptroller Sonia Aldrich and Assessor David Burgess, along with department heads.
Pooler said bonds can be sold for more and receive lower interest rates with the new rating.
“Although the town already had a very good bond rating, this upgrade will make it even more likely that we will sell our bonds at the highest prices and lowest interest rates available in today’s markets,” he said.