Mayor Ken Hopkins announced Friday in a press release that Fitch Ratings Agency affirmed Cranston’s AA+ rating on the city’s outstanding general obligation bonds. As part of a scheduled …
Mayor Ken Hopkins announced Friday in a press release that Fitch Ratings Agency affirmed Cranston’s AA+ rating on the city’s outstanding general obligation bonds. As part of a scheduled review for an upcoming refinancing of a series of notes and bonds, the credit analysts studied Cranston’s financial condition and the management structure of Rhode Island’s second largest city.
“This is tremendous news for the city and taxpayers as one of the premier credit rating agencies in the nation has recognized our strong fiscal management practices and ability to lead through a period of budget challenges,” said Hopkins in his announcement. “In retaining our overall bond rating Fitch has given reassuring financial perspective to the financial and bond markets.”
Fitch Ratings is an American credit rating agency; it is considered one of the big three credit rating agencies, along with Moody's and Standard & Poor's.
“The direct benefit to taxpayers is lower interest rates for our long-term debt service when we borrow,” said Hopkins. “At a time when we are spending millions of dollars on our school buildings and facilities, it is great news that we will be very competitive in our borrowing terms.”
Fitch analysts took time to look at city finances, understand recent executive actions Hopkins initiated and applied several factors in arriving at the assigned rating. Analysts looked at the city’s revenue and expenditure frameworks and operating performance. According to Hopkins, Fitch cited Cranston’s high revenue raising ability, adequate expenditure flexibility, solid reserve levels and moderate long-term liability burden.
“The analysts noted last year’s net operating surplus of $674,000 and our projection of another surplus for the year that just ended on June 30,” Hopkins said. “The tough decisions I have been making on needed revenue, difficult layoffs and reduced spending is reflected in the Fitch analysis.”
The mayor said he faced historic inflation, reductions in state aid, significant health care costs and many other expenses beyond his control.
“In the end our city’s future health will be stronger for the actions we are taking today,” Hopkins said.
Hopkins complimented Chief of Staff Anthony Moretti, Acting Finance Director Michael Igoe and Personnel Director Daniel Parrillo who have spearheaded the mayor’s directive to examine all aspects of city finances.
“I said we would undertake a comprehensive review of the entire budget landscape and operations of city government,” Hopkins said. “The Fitch Ratings announcement should reassure all taxpayers and residents that we are keeping Cranston going in the right direction.”
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