Moody’s Investors Service released its annual rating last week (Tuesday, April 11), awarding Wilton a triple-a (Aaa) rating for another consecutive year. Triple-A is the service’s highest evaluative level in its assessment of financial stability and credit worthiness.
A triple-A rating means Wilton falls into the category of towns with the “lowest level of investment risk.”
According to an opinion released by Heather Guss, a Moody’s analyst who has evaluated Wilton for the last two years, the Aaa rating was assigned to Wilton’s $8.7 million General Obligation Bonds, Issue of 2017 (Bank Qualified). Moody’s maintains the Aaa rating on $74 million of outstanding general obligation debt. The outlook is stable.
“The Aaa rating reflects the town’s sizable and affluent tax base, stable and sound financial position, manageable debt burden, and prudent funding of pension and OPEB liabilities.”
Wilton’s CFO, Anne Kelly-Lenz, told the Board of Selectmen on Monday evening (April 17) that the Moody’s analyst liked the fact that there is more being done to encourage economic development, and the town recently approved a zoning change that would allow age-restricted development, a factor that should drive future growth. Additionally, Guss pointed to the recent influx of medical-related businesses that are establishing bases in Wilton.
Among the challenges they acknowledged that Wilton faces: “Likely loss of education aid due to the state’s budget gap” as well as the “potential shifting of some teachers’ pension costs to the town from the state.” Both of those are external challenges, driven by fiscal issues at the state level.
In light of those economic challenges from Hartford, the Moody’s analysts feel very secure that not only does Wilton keep 10% of budgeted expenditures in the town’s fund balance, but that it’s the normal procedure for town finances.
Kelly-Lenz said that overall, Moody’s analysts were “very happy with the direction of the town,” specifically mentioning the efforts of Wilton’s first selectman Lynne Vanderslice. Kelly-Lenz noted: “They consistently say we are well managed.”
In the report, the Rating Outlook was positive: “The stable outlook reflects the town’s trend of stable financial operations with healthy reserves that will continue given strong management, conservative budgeting, and adherence to formal policies.”
The factors that could lead to a downgrade include:
- Trend of operating deficits resulting in a material decline in reserve
- Significant declines in the tax base or deterioration of the demographic profile
- Material growth in debt burden