City bond rating has been upgraded by Moody's
Strong fiscal management leads to huge savings for city

(New Bedford) - Mayor Frederick M. Kalisz, Jr. announced today that Moody’s Investor Services has upgraded the city’s bond rating to Baa1 (B Double A One), just one step below an A rating. When the mayor first took office in 1998, the city’s rating was Baa3, the lowest so-called “investment grade” just below junk bond.

Mayor Kalisz said, “For the second time in my administration, the strong financial management practices that I have implemented have led to an increase in the city’s bond rating. The upgrade will save the city hundreds of thousands of dollars and will reduce the cost of bond insurance.”

According to Moody’s “The overall debt burden is an affordable 2.9%, which includes a small amount ($4.8 million) of overlapping regional vocational high school debt. After deducting significant (90%) state school building aid, New Bedford’s overall debt burden drops to a low 1.1%.”

“Moody’s expects New Bedford’s financial operations to strengthen as positive operations continue to replenish draws on reserves and increase fund balances. Operations in 2004 produced an operating surplus of $2.88 million dollars, including a one-time unbudgeted $2.2 million school department revenue surplus and a $660 thousand city revenue surplus.”

The report continues, “Moody’s believes that the city tax base will sustain strong growth, as the declining trend in full valuation that was seen in the early 1990’s has now reversed; the city has averaged 10.5% annual growth since 2000 with 2005 value exceeding $4.6 billion. The city has enjoyed annual new growth revenue averaging over $1.7 million since fiscal 2000 due to steady residential tax base growth and appreciation, commercial growth and industrial expansion as TIF incentives expire.”

Mayor Kalisz said, “I hope this report enlightens those city councilors who repeatedly falsely tell the public the city’s finances are in poor condition. The independent review by Moody’s shows in fact how I have led our community to fiscal discipline and strength. Of particular importance is the comment by Moody’s that our overall city debt burden dropped to a low of 1.1%”

Mayor Kalisz continued, “We are rebuilding our community, schools and infrastructure in a fiscally sound manner with as little impact as possible on our residential taxpayers.”

As a result of these actions, and the small amount of the city bonded debt, Mayor Kalisz intends to announce several additional capital projects to continue to strengthen the city’s neighborhoods.

"This bond rating, issued by an independent agency, reflects Moody's confidence in the financial strength of the City," said Chief Financial Officer Dan Patten. "Moody's has been monitoring the City almost yearly for the past 15 years, reviewing proposed budgets, current operations and the audits of previous years. What they have seen under this administration has led to two upgrades in the past 5 years."