LETTER: Selectman Says Standard & Poors Has Upgraded Tewksbury's Fiscal Outlook
Oct 24, 2014 08:33PM ● Published by Bill Gilman
Letter to the Editor
To my fellow Tewksbury Residents:
We had a recent meeting with Standard & Poors and they affirmed our rating at AA, but they also changed the Town of Tewksbury “outlook” from stable to positive – and that is not insignificant. Usually a positive or negative outlook, rather than a stable outlook, means they expect to be making a rating adjustment within twelve to eighteen months. Positive outlooks say a lot to the market. Even at an affirmed AA, the positive outlook will be taken very favorably.
There were two reasons cited for the positive outlook. First, S&P liked our recently adopted policies. However, they also noted that they were relatively recently adopted and wanted a little more time to follow the adherence to those policies. And second, they continue to focus on our unfunded liabilities – the two together relative to our total budget, and the OPEB liability in particular in terms of the size of the liability and how the Town would hope to address it. This may be the single most important issue to focus on before the next rating review.
In general, S&P was very complimentary about the progress made over recent years, especially getting reserves up so substantially when they were at levels warranting concern not that many years ago. They also like all the trends they see in the Town – they just want to see them a little longer. We shouldn’t underestimate or understate the value of the positive outlook but should assume our continued good efforts will get us to that AA+ That is what a positive outlook says to the world.
To my fellow residents, make no mistake, this is because of the great work of our Town Manager, Richard Montuori. There was a time, about 7 or 8 years ago and prior to the leadership of Town Manager Montuori, when Tewksbury needed additional funds to balance our budget but we defeated a Proposition 2 ½ override. Not soon after that vote, the town “found” over a million dollars to balance the budget. Those days are gone and Standard and Poors recognizes it as well.
We still have a lot of work to do. But Tewksbury, through the leadership of Town Manager Montuori and the Town Department Heads, is on the right path. In the next 3-5 years, we are going to need a new Center Fire Station as well as new Elementary Schools. Our S&P rating will significantly impact the rate at which we can borrow the funds to pay for these capital investments.
If you have any questions, you can reach me directly at (978) 394-4689 or through the Town Manager’s office at (978) 640-4300.