City bond rating upgraded to AA+

By Medford Transcript

Mayor Stephanie M. Burke is pleased to announce that the City of Medford’s bond rating has been upgraded to an “AA+” bond rating by Standard & Poor’s Global Ratings (S & P), a municipal bond credit rating agency. S&P also assigned the city to its +1 rating to the notes, the highest short-term rating attainable.

“I am proud of the great work completed by City Treasurer Ann Marie Irwin and the Director of Finance Aleesha Nunley, as well as their teams, to increase our bond rating,” Burke said. “The city is moving forward with a very strong, sturdy and stable bond rating, while improving economic development and growth throughout the community, making Medford an even more desirable place to live and work.”

As of Sept. 18, the City Treasurer received competitive bids from bond and note underwriters for a $3.375 million, 28-year state qualified bond issue and a $2 million, 291-day bond anticipation note issue. Robert W. Baird & Co., Inc. was the winning bidder on the bonds with an average interest rate of 3.49% and Eastern Bank was the winning bidder on the notes with a net interest cost of $2.06%.

The city received a total of three bids on the bonds and four bids on the notes. Bond and note proceeds will be used to finance various municipal projects; including: City Hall renovations, Riverside Ave Plaza and Police Headquarters planning, among others.

S&P highlighted the city’s strengths:

– Very strong economy, with access to a broad and diverse metropolitan statistical area (MSA)

– Strong management, with good financial policies and practices under our Financial Management Assessment (FMA) methodology

– Strong budgetary performance, with slight operating surpluses in the general fund and at the total governmental fund level in fiscal 2017

– Very strong budgetary flexibility, with an available fund balance in fiscal year 2017 of 8.1 percent of operating expenditures, and capacity to raise additional revenues despite statewide tax caps

– Very strong liquidity, with total government available cash at 24.9 percent of total governmental fund expenditures and 6.5x governmental debt service, and access to external liquidity considered strong

– Very strong debt and contingent liability position, with debt service carrying charges at 3.8 percent of expenditures and net direct debt that is 23.4 percent of total governmental fund revenue, as well as low overall net debt at less than three percent of market value and rapid amortization, with 68.6 percent of debt scheduled to be retired in 10 years.

According to S&P, “Medford’s economy is very strong. The city, with an estimated population of 59,630, encompasses 8.2 square miles in Middlesex County in the Boston-Cambridge-Newton MSA, which we consider broad and diverse. Medford has a projected per capita effective buying income of 135 percent of the national level and per capita market value of $162,558. Overall, the city’s market value grew by 7.9 percent over the past year to $9.7 billion in 2018.”

This article provided by NewsEdge.