For the first time in four years, Moody’s Investors Service has downgraded Hartford’s bond rating.
On Thursday, Moody’s issued an ‘A2’ rating to the city’s $352 million of outstanding debt, with a negative outlook. It also assigned an A2 rating to the city’s recent series of 2013 bonds, which totals $82 million.
Moody’s cited declining financial reserves expected to be further depleted by budget deficits. Moody’s also cited the city’s sizeable pension and debt liabilities, stagnant property values and reliance on one-time revenue sources.
The city’s recent choice to extend the repayment schedule for its $1 billion net pension liability by a decade in order to create short-term relief indicates “significant financial strain,” Moody’s said.
The downgrade comes at a bad time for the city as it considers a major investment in a minor baseball stadium in downtown Hartford.
The city has held an ‘A1’ rating since 2010, which is when it began a three-year run of consecutive budget surpluses. Though A2 is a notch lower than A1, both are considered in the middle of ‘investment grade.’
Mayor Pedro E. Segarra’s office released a statement Thursday saying the mayor was disappointed with the rating.
“The City of Hartford has held the line on spending by operating with minimal staff, despite the fact that the need for city services continues to grow,” the statement said. “This is precisely why we need to expedite economic development in our capital city, and why public/private partnerships are a better option than bonding.”
When Segarra announced plans in June to build a baseball stadium for the Rock Cats in Downtown North, he initially hoped to borrow $60 million for the project.
But he backed away from that a month later, saying a public-private partnership made more fiscal sense.
The city has selected a development group led by Centerplan Cos. and Leyland Alliance to lead development of the stadium and the neighborhood around it.
City Council President Shawn Wooden said in the mayor’s statement that the city needs new revenue sources and new development that will “increase property values and not place any further burden on our taxpayers.”
