Watertown's Credit Rating Good, But Outlook Turns 'Negative'Posted: Updated:
Watertown's credit rating stays the same, but the company establishing it changes its outlook on city finances to "negative."
Moody's Investors Services says Watertown keeps its Aa3 credit rating, which is a good rating, saying it reflects Watertown's strong, but recently weakened financial reserves and incorporates the city's elevated, but manageable debt burden.
While the credit rating stays the same, Moody's outlook on Watertown turns to negative, with Moody's saying it reflects that reserves will continue to struggle keeping up with a growing budget resulting in a further decline in available fund balance.
Why is this important? Just like your credit rating, the better it is, the cheaper it is to borrow money. You get a better interest rate.
This solid rating for the city is good for 18 months and comes as Watertown borrows $6.7 million for various upcoming projects:
- Factory Street reconstruction: $259,000
- Library HVAC replacement: $36,000
- Flower Ave. East reconstruction: $3,128,000
- Massey St. Fire Station HVAC replacement: $360,000
- Water Treatment Plant Roof replacements: $80,000
- Hydro-electric Facility Improvements: $1,800,000
- Western Boulevard construction: $515,000
- Sidewalk Assessment District #12: $42,000
- Thompson Park Retaining Wall: $265,000
-Flynn Pool Improvements: $200,000
What it doesn't take into effect is borrowing millions for a new Thompson Park pool and second city courtroom.
City Manager Rick Finn sent us the following comment:
"The most critical thing is that the City did retain its existing Credit rating at Aa3. However, as I see it the negative outlook comment by Moody’s was a gentle reminder to the City that we need to rely less on our Reserve funds to balance the annual budget. Good solid fiscal management in any Public municipality requires that annual revenues should equal or exceed annual expenditures. My Staff and I are committed to reversing this past trend and in the very near future bring the City back to a totally Balanced budget with expenditures not exceeding revenues."