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Credit agencies affirm Meriden’s stable financial status

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MERIDEN — One agency upgraded the city’s bond rating while another reaffirmed a strong rating, with both in agreement on the city’s stable financial status.

Standard & Poor Ratings Service upgraded the rating to AA, up one grade from its previous AA-. The agency feels Meriden’s economic profile is “strong” and “a number of economic development and redevelopment projects” could revitalize downtown, according to a report issued to the city.

Fitch Ratings issued a rating of AA- this week after a review of city finances. The AA- rating is one the city has received from Fitch each year since 2011 and means Meriden is viewed as having a “very high credit quality” and “stable operating performance.”

“It’s good news,” Finance Director Michael Lupkas said. “They have recognized what we’ve done, the financial policies we’ve implemented and our adherence to those policies and that we’ve produced fiscal results.”

The city is typically graded by bond rating agencies annually, but the timing of this rating came at City Hall’s request. Meriden will sell nearly $54 million in bonds Tuesday and the ratings will help secure low interest rates over the next 20 years, Lupkas said.

The bonds will fund several projects, including the Maloney and Platt high school renovations. Much of the $220 million project is funded by the state, while about $55 million will be paid by the city. Of the $54 million in bonds being sold, Lupkas estimated $35 million are for school projects, including the high schools and boilers and roofs for other schools.

“That’s the major factor driving this bond issue,” Lupkas said. “This is a big sale for the city. A typical sale is in the $15-20 million range...We haven’t done a bond sale in more than two years so all of the projects over the last couple of years are now being funded.”

The city sold about $11 million in bonds a few years ago for the high school projects and another $11 million will be sold in the next two years or so, Lupkas said. Other projects included in the sale are the purchases of vehicles, the reconstruction of sidewalks and street repairs.

Key rating drivers from Fitch included moderate financial reserves, a stable operating performance, a “moderate” level of debt, and “adequate” funding of pension plans. Standard and Poor’s considered the city as having a “strong budgetary performance” with surpluses in eight of the last nine years and “very strong management practices.”

The Fitch bond rating did not increase because of “a relatively high level of joblessness,” in addition to the median household income remaining lower than desired. The Fitch report does note the city has seen an increase in building permits issued and the city has been active in property acquisition, zoning regulation and development incentives. Standard and Poor’s said it does not expect to change the AA rating over the next two years.

City Council Finance Committee Chairman Steven Iovanna said he was encouraged.

“It’s a great bond rating and shows the city is going in the right direction,” he said. Twitter: @DanBrechlinRJ

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