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WEST HAVEN, Sept. 8, 2021 — S&P Global Ratings on Tuesday, Sept. 7, affirmed West Haven’s credit rating at BBB while upgrading its outlook on the city’s general obligation debt to “positive” from “stable,” Mayor Nancy R. Rossi announced.
“We have assigned our ‘BBB’ long-term rating to the city’s $20.5 million series 2021 (general obligation) bonds and affirmed our ‘BBB’ rating on its existing (general obligation) debt,” S&P said in its bond credit analysis.
“The outlook revision reflects improved performance based on structural budgetary changes and stronger budgetary controls evidenced by positive operations in both 2020 and 2021, despite the challenges posed by the pandemic,” S&P said. “Notably, the city has benefited from state (Municipal Accountability Review Board) oversight and through state restructuring grants; however, its financial position has been improving quicker than anticipated, when compared to the original five-year financial plan it adopted.”
“This bond rating outlook upgrade from neutral to positive is great news for West Haven,” Rossi said. “It is evidence the financial sector acknowledges that West Haven is on the right path.”
Rossi continued: “The outlook was negative when the city was in financial chaos four years ago. We produced three consecutive balanced budgets with a surplus, are projecting another budget surplus for this fiscal year, and have built a healthy rainy day fund. This outlook upgrade will allow the city to compete for lower interest rates on future borrowing.”
In its report, the New York agency said that in 2020, “West Haven saw positive revenue variances in several categories, the largest in MARB funds as the state did not fully fund its original budgeted amount because the city’s local revenues outperformed budgeted expenses.”
On the expense side, budgeted expenses were under budget by about $3.6 million, according to the report, adding that the city anticipates about $655,000 in expenditure savings in 2021.
The report pointed out that “several long-standing economic development projects are moving forward despite the current recessionary period,” including The Haven, “a $200 million luxury fashion outlet mall that is expected to generate $2.5 million in taxes at full buildout.”
The Acorn Group, responsible for The Atwood-University Commons development, “is continuing to develop mixed-use properties with full residential occupancy.” The Yale New Haven Health Regional Operations Center has also been completed and has additional acres for development, the report said.
According to the report, the city is seeking to generate economic activity in various areas through opportunity zones and transit-oriented planning and zoning regulations.
“West Haven continues to apply and receive grants for various economic and infrastructure improvements, with the most recent for $5 million in sustainability improvement for Beach Street, which has spurred additional development for underutilized properties in the area,” the report said.
“It is a nice feeling for our hard work to be recognized by Standard & Poor’s, a worldwide, independent credit rating agency,” Rossi said. “West Haven is definitely on the right path!”