East Haven's Credit Rating May Increase

East Haven Finance Director Paul Rizza announced today that, based on news of the Town’s $820,077 surplus and in conjunction with the Town’s recent capital improvement bond issue, Standard and Poor’s has signaled the potential for another credit rating increase for East Haven in the next year.

Rizza explained in a prepared statement, “Credit rating increases are coveted and difficult to earn. Municipalities must show balanced operations, the ability to pay off debt, and must maintain a healthy fund balance. Over the past four years, we’ve done all of these things exceptionally well.”

Updated figures from Finance Director Paul Rizza indicate that in the 2014-2015 fiscal year, the Town had revenue of $88,534,377.00 dollars and expenditures totaling $87,713,300 dollars, resulting in a $820,077.000 dollar surplus. That surplus, according to Rizza, is automatically added to the Town’s fund balance, or rainy day fund.

Rizza explained, “In 2011, the Town’s fund balance, or rainy day fund, stood at a paltry $200,800.00 dollars. According to our updated budget numbers from the 2014-2015 fiscal year, which closed on June 30th, the Town’s fund balance presently stands at a healthy $3,372,053.00 dollars - an increase of over 1,600%.”

Rizza added, “Since 2011, we’ve restored our fund balance by holding the line on spending and by aggressively work paying off the crippling debt accumulated in previous years. Along the way, we’ve balanced four budgets in four years and, this past year, were able to provide residents with the largest tax reduction in a non-revaluation year since 1989. IN the past four years, East Haven has enjoyed a substantial financial turnaround.”

According to the Financial Summary published by Standard and Poor’s on September 2nd, East Haven maintained its “A-” long term credit rating and was assigned an “SP-1” rating to its newest bond issue. The “SP-1” rating, according to the definition published by Standard and Poor’s, indicates the Town’s “strong capacity to pay principal and interest.”

More importantly, in discussing the Town’s long term, “A-” rating, Standard and Poor’s indicates that, “The positive outlook on the long-term rating reflects our view that if the town continues to maintain balanced operations, rebuilds its general fund balance, and shows progress in improving its internal service funds, we could raise the rating in the next year.”

Rizza concluded, “Between 2007 and 2011, the Town ran three deficits and suffered two credit rating reductions. Since 2011, we’ve raised our credit rating from “BBB+” to “A-.” I am confident that with continued financial discipline, we will earn another coveted credit rating increase in the next year.”