This is a printer-friendly version of an article from Zip06.com.

Fitch Ratings Upgrades Guilford’s Credit Rating

Fitch Ratings announced on October 6, 2016 that it has upgraded Guilford’s credit rating from AA+ to AAA. The upgrade reflects a combination of positive credit trends and the application of Fitch’s revised criteria for U.S. state and local governments, released on April 18, which incorporate a more focused consideration of the adequacy of an issuer’s reserves and the use of scenario analysis in the rating process.

“We are delighted to receive an upgrade in credit rating from another credit rating agency as we continue to receive AAA ratings from Standard and Poor’s and now Fitch Ratings, which recognizes our attention to strong fiscal management,” said First Selectman Joseph Mazza.

The AAA IDR and GO ratings reflect the town’s exceptionally strong gap-closing capacity, positive prospects for revenue growth, and solid operating performance. The town’s strong financial profile reflects a wealthy property tax base and manageable expenditure growth. Fitch expects long-term liabilities to remain low based on manageable capital needs and well-funded pension plans that are closed to new entrants.

The town has improved financial flexibility since the last recession, evidenced by the town replenishing its general fund reserves for six consecutive years. The town ended fiscal 2015 with a $1.1 million operating surplus (1.1 percent of spending), increasing unrestricted reserves to $8.5 million or 8.9 percent of spending.

Because of positive revenue variances and expenditure control, management is estimating another positive year of general fund operations in fiscal 2016, increasing total general fund reserves to about $10.8 million. The fiscal 2017 adopted budget totals about $93.2 million (about a 2.7 percent increase over the prior year), and is balanced without the use of fund balance. The fiscal 2017 budget includes a 1.5 percent increase in the mill rate to 28.67.