GREENFIELD — The city has maintained its solid credit rating with Standard and Poor’s, according to a recent report, receiving an “AA-” rating from the longtime financial institution.
The rating comes due to good financial policies and several other adequate performances in the economy, according to the S&P report. The city received the same rating last year, according to Finance Director Elizabeth Braccia, and can mean lower interest rates when the city borrows money.
“More investors will bid on our debt, which gives us competitive business rates,” she said.
Braccia said the solid rating comes due to a stable outlook on Greenfield’s economy and an ability to “repay our debt,” as well as strong financial management and practices.
“We really have shown our ability to manage our debt,” she said.
The bond rating could be higher though, and Braccia noted three items listed in the report that could be improved.
Braccia said the city’s management of other post-employment benefits, or OPEB, could be better. These benefits include health insurance after employees retire from the city.
According to the report, the city faces an obligation of $71.9 million in post-employment benefits as of July 1, 2015. This number though includes projections based on current employees and what they will receive in benefits post-retirement, according to Braccia.
Braccia said they do not have an accepted plan to manage and pay for OPEB, though she previously suggested annually budgeting funds from “free cash” surplus to go into a trust to pay for the benefits.
Another weakness is the amount of outstanding debt compared to the city’s annual revenue. Braccia said the debt equals 80 percent of Greenfield’s revenue, which is high. The report indicated 68.5 percent of that debt is expected to be paid off within 10 years, which was a positive.
A third weakness listed by Braccia is the amount being paid into city pensions each year is not satisfactory. Braccia said a plan is in place over the next two years to increase payments into pensions in the city budget.