Cranston's Bond Rating Ticks Up from A to AA-

Cranston’s bond rating has just been upgraded by Standard & Poor’s from A to AA- and it couldn’t have come at a better time, said the mayor of Rhode Island’s third largest city.

Cranston Mayor Allan W. Fung notes that the city will be issuing bonds for much needed school and infrastructure improvements in the very near future. The improved bond rating means the city will enjoy lower interest rates — and that means savings for taxpayers.

“This announcement by S&P reflects the success of our ongoing efforts, not only to resolve past fiscal issues confronting the City of Cranston, but also to plan for long term economic growth,” Fung said. “Last month, we toured the City of Cranston with representatives of the three national rating agencies and I am hopeful that the others will join S&P in recognizing our growing success”

The city also will refinance existing bonds to cut down on debt service payments.

S&P noted the city’s improving economy, the declining unemployment rate and “improved financial performance.”

“Over the last several years, we believe the current administration’s actions have been positive and the management team has demonstrated several years of balanced operating results.”

Specifically, the ratings agency liked seeing general fund surpluses, the city’s efforts to reduce costs and strong financial controls and oversight.

At the same time, Cranston has managed to fully fund its annual required contributions into pension plans and it’s other post-employment benefit liability, or OPEB.

“We note that not many communities in the region have fully funded their OPEB ARCs,” the report stated.

Though Cranston has one of the most onerous pension liabilities in the state, along with extremely powerful unions, local property taxes have essentially stayed flat for more than three years. Fung, along with his Finance Director, Robert Strom, can take credit for fixing a structural deficit and steering the city away from what seemed like an inevitable bankruptcy in the mid- to late--2000s.

Fung said he personally conducted tours for representatives of Standard & Poor’s — along with officials from Moody’s and Fitch Ratings — to “demonstrate current economic development and potential for future growth.”