After a record-setting rate on bond sales is approved today, town officials said the focus will turn to investing the town’s rainy day fund in order to help gain interest and preserve the town’s positive bond rating for years to come.
The town today will finalize a bond sale from Feb. 22 in which Southington sold $15,335,000 in general obligation bonds to Robert W. Baird & Co. Inc. at a rate of just 3.17 percent. The rate is the lowest in the town’s history, according to Finance Director Emilia Portelinha, and was the second-lowest rate in the state 2011 behind Greenwich.
The bonds will cover costs for projects including the Plantsville School renovation, the construction of a new South End School, the Vo-Ag Center, purchase of the Jurglewicz property, construction of a water main along West Center Street and others.
“It is a testimonial to how we conduct business in the town of Southington,” said Town Council Chairman Edward Pocock III. “It also makes it important for us to look at the reserve funds and make that 10 percent safely grow.”
The bonds were purchased after Standard & Poor’s assigned a AA+ bond rating to Southington, largely due to the fact that the town has accrued about $12 million, or approximately 10 percent of the annual budget, in the rainy day fund.
Town Manager Garrison C. Brumback said the rating should be a source of pride – it’s by far the lowest he’s seen in his time as a municipal manager, but said the work is far from done.
“We need to continue our focus and move forward with developing a strategic plan on how to invest, develop a strong bonding policy and determine how to use our cash efficiently to maintain a healthy fund balance and address issues within the community,” Brumback said.
This money is a good start, Pocock said, but a bi-partisan effort to look how to invest the money safely in order to make it grow faster could help improve that fund balance even further.
The town has not yet developed an investment plan but has begun talking with several financial advisors to determine the best practice for municipal investing.
“We are just starting to look at things but its time to iron out a policy to be more efficient in how we do things,” Pocock said.