Infrastructure Key in Maintaining Strong Financial Rating

Southington continues to maintain a top-rate grade for its financial stability with the rating service Standard & Poor’s thanks to a concentrated effort over the past decade, but officials said to maintain the rating moving forward the town will need to put a strong focus on improving infrastructure.

Board of Finance Chairman John Leary said the recent return of an AA+ rating from Standard & Poor’s puts the town in a strong position, but work is needed on schools, roads and other town buildings in order to prevent growing needs that could have adverse effects long-term.

“At times, we are going to need to spend money to maintain the rating,” Leary said. “Prior (boards and councils) and this group have all been focused on keeping us in a fiscally conservative position. We now have no choice but to begin putting a focus on infrastructure – if we have $12 million in the reserve with $100 million worth of repairs needed in buildings and roads, it doesn’t help.”

Let Patch save you time. Get great local stories like this delivered right to your inbox or smartphone every day with our free newsletter. Simple, fast sign-up here.

The town has found success through the development of a reserve fund that has remained over 10-percent in recent years, Southington Town Manager Garry Brumback said.

Furthermore, the reserve has not been touched thanks to planning and transfers, Brumback said, allowing the community to not only maintain the rate, but to simultaneously secure the lowest interest rate in the town’s history at 1.5 percent when the town recently refinanced their bonds from 2005.

“It’s something that will save the taxpayers and the town $780,000 in interest,” Brumback said. “There was about $16 million in bonding and with the refinancing, we took the interest rate from 4 percent to 1.5 percent.”

Brumback credited previous boards for implementing strong fiscal policies and Southington Finance Director Emilia Portelinha and her staff for helping implement them effectively.

Brumback and Leary each said the town has also taken some of the most critical first steps in improving infrastructure and voters decisively voted to approve referendums on middle school renovations in 2011 and the first phase of road improvements in 2012.

Leary said the town is also operating with a balanced budget for the first time in 2012-13, but also noted that the budget must remain that way moving forward and policies established to assure the town takes proper steps to continue addressing infrastructure needs year to year to avoid allowing the debt to grow too quickly or needs to build up.

“If we are able to do all this with a moderately controlled tax rate, continued economic development and strong financial policies, we will end up with a net healthy town and that will continue to be reflected in ratings,” he said.

Make sure to like Southington Patch on Facebook or follow on Twitter for breaking news, daily updates and more!