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Town Receives Large Bond Rating Increase to "AA"

Posted on
March 17, 2023
Town Manager's Office
The Town of Winchester/Winsted, CT is excited to announce that it has earned a large bond rating upgrade to “AA” from S&P Global Ratings in preparation for its impending general obligation bond issuance that will cover costs related to the Hinsdale School renovation project and the Town’s 2022 Infrastructure Improvement Plan! Previously, the Town had been issued an “A1” from Moody’s Investors Service, the equivalent of an “A+” rating with S&P. This jump to a “AA” rating marks an improvement of not one, but two rating levels.

According to the files publicly available on the Moody’s Investors Service website, the Town of Winchester has never been rated as highly as “AA/Aa2,” with its last highest rating having been a “AA-/Aa3” rating in the 2004 - 2010 timeframe. Moody’s had downgraded and subsequently withdrawn their rating of Winchester’s bonds following the discovery of embezzlement by a former Director of Finance. The Town did not have a rating restored until 2019, when it was issued the “A+/A1” rating by Moody’s. 2023 will be the first year the Town has issued bonds since the mid-2000s, and this jump from an “A1” rating with Moody’s to a “AA” rating with S&P reflects the significant improvements that the Town has made internally at Town Hall and externally in the community.

“Winchester has come such a long way in a decade, when it was dealing with issues of embezzlement and State conservatorship. We have stable and pragmatic leadership from the Board of Selectmen, new internal controls and checks and balances within the Town government, new businesses opening on Main Street and around town that are growing job opportunities to local residents, more people moving to town, and an overall sense of excitement for the Town’s future. We are taking the time to invest both money and time in the future success and growth for the town, and this big increase in our bond rating is a wonderful reflection of that progress,” said Josh Kelly, Winchester Town Manager.

“The bond rating increase is a direct result of the steadfast leadership of Town Manager Kelly and Geiger before him as well as the dedication and hard work of the members of the Town’s Finance Department,” said Mayor Todd Arcelaschi. The Town’s Finance Department was led for six years, until the end of 2021, by Bruce Stratford, and since then Director of Finance Ann Marie Rheault has taken the reins and has been the one to implement the 2022 Infrastructure Improvement Plan financially, which has led to this bond issuance and bond rating increase.

“I’m thankful to the staff working in our department for their hard work and to my predecessor, Bruce Stratford, who led the Finance Department out of a very dark time in this town’s history. The Town has made amazing strides in its financial recovery since the discovery of devastating losses almost a decade ago. The Town is now on solid footing to make much needed and long-awaited infrastructure improvements. This increase in the bond rating reflects S&P’s confirmation of the Town’s financial stability and their optimistic outlook for the Town’s continued progress forward,” said Ann Marie Rheault, Director of Finance.

Bond ratings are important because they are generally indicative of the kind of interest rate the Town will have to pay on the bonds they issue. The higher the bond rating, the lower the interest rate will typically be. Winchester’s bond rating increasing so dramatically will ultimately result in lower interest rates on the bonds they issue next week, and in turn a lower tax burden for residents in the future.

The Town’s bond sale will take place on Thursday, March 23, 2023. The total sum of bonds being issued is $11.5 million; $4.1 million for the Hinsdale School Renovations, $1.4 million for the replacement of the Tower 1 Fire Engine, $600,000 for sidewalk improvements, $250,000 for drainage improvements around Highland Lake, and $5.15 million for road and bridge improvements. The 2022 Infrastructure Improvement Plan, which includes each component of the bond issuance except for the Hinsdale portion, is a plan that was approved at referendum in May 2022 that allocated $24.7 million to the Town’s infrastructure between 2023 and 2027. The Hinsdale project was originally estimated to cost the town around $10 million; thanks to the hard work of the Superintendent of Schools, Melony Brady-Shanley, and the other members of the Hinsdale building committee, that cost has been reduced to just $4.1 million, a 59% savings.