City officials say Milford credit rating remains strong

A letter to the editor that appeared in a local daily newspaper and stated that the city’s credit rating dropped has city officials moving to set the record straight. They say the city’s credit rating has remained stable and strong and has not been downgraded.

In his letter, resident Jeffrey Cochrane said the city’s rating went from AAA to AA.

“This means we will have to pay a higher interest rate when borrowing money for a bond,” Cochrane wrote. “That means we the taxpayer will have higher taxes to pay for the extra cost.”

But Mayor Ben Blake and City Finance Director Peter Erodici Jr. said the letter is inaccurate.

“We are at AA+,” Blake said. “We were never at AAA to the best of my knowledge.”

Blake said the city’s credit rating increased to AA+ about six years ago, “and we have maintained it,” he said.

Erodici sent a follow up letter to local newspapers after reading Cochrane’s letter.

“This is not accurate, and historically, the city’s underlying credit rating has never been downgraded. In fact, the city’s rating was increased in 2009 to an AA+ rating, and has since remained stable.”

Erodici added that AA+ is a prestigious credit rating that denotes a very high credit quality.

In a press release late last year, Blake announced that Fitch Ratings, Moody’s Investors Service, and Standard & Poor’s Rating Services described Milford’s finances as stable, prudent, and healthy, and Blake said that hasn’t changed.

Fitch rated Milford’s general obligation bonds ‘AA+’, noting that “conservative budget practices, moderate property tax increases, and prudent debt policies have contributed to solid reserve levels providing for financial stability” in Milford.

The agency cited several key factors supporting the high rating: sound financial management, strong and stable reserves, moderate debt levels, well-funded retiree costs, and a history of successful access to the municipal bond market.

The other agencies offered similar comments.

Because of its favorable rating, the city has been able to benefit from lower interest rates on bonds, Erodici said.

“In addition, Milford’s AA+ status has allowed the city to refinance or refund prior debt, thereby realizing taxpayer savings of approximately $3.2 million over the years,” Erodici added.