Moody’s Investors Service on Thursday announced that it had upgraded the city of New Haven’s bond rating outlook from “negative” to “stable.”
At the same time the bond-rating agency affirmed and maintained the city’s bond rating of Baa1.
The news was welcomed by Mayor Toni N. Harp and city Controller Daryl Jones, who said Thursday the revised outlook reflected both a projected budget surplus for FY 2019 that would eliminate the city’s deficit fund balance position, as well as continuing growth in the city’s tax base.
In its announcement Moody’s cited as credit strengths the city’s strong institutional presence, especially Yale University and the Yale New Haven Health system, as well as a reduction in fixed costs following a series of debt restructurings.
Credit “challenges” cited by Moody’s included a high dependence on intergovernmental revenues (i.e., transfusions of capital from the state and federal government), elevated long-term liabilities such as pension obligations, and limited operating flexibility.
“It’s gratifying to see that my administration’s strict financial policies balanced the FY19 budget, eliminated the FY18 negative fund balance, and inspired Moody’s to favorably reconsider New Haven’s financial outlook and credit worthiness,” Harp said on Thursday. “City residents, property owners, and business operators will likely embrace Moody’s willingness to formally underscore New Haven’s ‘stable’ fiscal prospects.”
Added Jones, “Changes we’ve made related to revenue, expenses, health-care costs and managing the capital budget all contributed to the Moody’s upgrade.”
