Standard & Poor praises Sutton during rating review
By Robert Fucci
Town Administrator Jim Smith said without the diligent work of his financial team, the most recent visit by Standard & Poor would not have been as successful.
The bond rating agency’s visit last month concluded with a report so positive, the town’s rating was raised from AA to AA+, one step away from AAA, the highest rating possible.
“This was a team effort,” Smith said during the Nov. 7 Board of Selectmen meeting. “(Town Accountant) Tim Harrison was the lead. All of us have been very conscious of the ratings and have been promoting the AA standard rating.”
In its reasoning for the rating increase, S&P said Sutton’s outlook is stable. It deemed the town’s economy as very strong with access to a broad and diverse metropolitan statistical area.
S&P praised the town’s strong management and said it had good financial policies and practices under the Financial Management Assessment methodology.
The agency noted Sutton’s strong budgetary performance and an operating surplus at the total governmental fund level in FY16.
“This is a champagne moment,” Selectman David Hall said. “We’ve upgraded from a really good bond rating, to begin with. Ten years ago we hit the ceiling; it was unrealistic to go higher. What you see here is very comprehensive. It’s not just one area we are talking about. It’s a full sweep of financial programs in place. This to me is the culmination of a decade of hard work to build our financial position and approach. We’re exceeding what we once thought wasn’t possible.”
S&P’s report states Sutton had a strong budgetary performance, had very strong budgetary flexibility, very strong liquidity, and a strong debt and contingent liability profile.
“We’re keeping Sutton open for business,” Chair Jesse Limanek said. “Buy Sutton bonds; you’ll get your return. We got our reward as a community.”
S&P reported it could raise Sutton’s rating again if economic indicators improve to levels comparable with that of higher rated credits and if the town strengthens its financial reporting practices and policies.
The rate could drop if operating performance were to become unbalanced.
The AA+ rating also gives Sutton $2 million in savings.
“All of us have been very conscious of the ratings,” Vice Chair John Hebert said. “We’ve been promoting the AA standard rating. Now we have a chance of an uptick to AA+. This comes with so much hard work and so much cooperation and presentation and figures. I want to commend not only the whole staff in Sutton but everyone who had some part in it.”