Guilford's Credit Rating Upgraded, Town's Strong Finances Cited

GUILFORD, CT — Fitch Ratings announced 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, 2016, which incorporate a more focused consideration of the adequacy of an issuer’s reserves and the use of scenario analysis in the rating process, town officials announced Thursday.

“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 in a prepared statement.

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-which 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% of spending), increasing unrestricted reserves to $8.5 million or 8.9% 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% increase over the prior year), and is balanced without the use of fund balance. The fiscal 2017 budget includes a 1.5% increase in the millage rate to 28.67.