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WEST HAVEN, Sept. 20, 2022 — Moody’s Investors Service on Tuesday, Sept. 20, confirmed a Baa3 rating on the city’s general obligation bonds while assigning a “stable” outlook, Mayor Nancy R. Rossi announced.
The confirmation “reflects the city’s improved financial position as a result of growth to cash and reserves and decreasing reliance on state-administered municipal restructuring funds,” Moody’s said in its bond credit analysis. “The likelihood of gradual improvement is enhanced by the increased presence of the (state) Municipal Accountability Review Board, which amplified its oversight of the city following (alleged) financial malfeasance by former employees … in an effort to defraud the city of federal COVID relief dollars.”
“That episode, combined with the MARB’s increased scrutiny of the city, resulted in a delay of the fiscal 2021 audit,” Moody’s said. “While the fiscal 2021 audit is still unavailable, the city has provided detailed unaudited information to both Moody’s and MARB that are of sufficient quality to maintain the rating pending receipt of the fiscal 2021 audit in November.
“However, Moody’s does not anticipate a substantive difference between the city’s unaudited and audited figures for fiscal 2021 because of the presence of MARB oversight and the redoubled efforts of new staff to strengthen the city’s financial reporting and controls.”
West Haven’s “solid economy” and “manageable debt profile” are also factored into the bond rating.
In its report, the New York agency pointed out that West Haven’s stable outlook “is driven by our expectation that the city will continue gradual financial improvement while strengthening its policies and procedures. This effort will be enhanced by the oversight of MARB, which will heighten the probability for fiscal stability.”