Posted by Jeremy Shulkin
Three major bond rating agencies, Moody’s, Fitch and Standard & Poor’s have all maintained their high ratings for the city of Worcester (respectively: A1, AA-, A-), despite a year of budget cuts, revenue loss and raised taxes for FY11.
In a report released today by the City Manager’s office, Manager Michael O’Brien credits MassPort’s takeover of the airport, the commencement of CitySquare, new PILOT agreements and collective bargaining contracts that have resulted in zero percent wage increases and higher health care contributions from public sector unions.
O’Brien wrote in his report that this shows investors Worcester is “a solid, long term investment.”
But that doesn’t mean everything is hunky dory in the city. O’Brien cites that both Moody’s and Standard & Poor’s had some warnings of a not so rosy future, singling out pension benefits and unresolved collective bargaining contracts as destabilizing factors. (Oh, hello, two week-old Worcester Mag article on this very topic.)
And it’s a convenient launching pad for some of his short-term financial goals: settling outstanding union contracts with zero wage increases and more benefits paid into the system by members, along with getting Worcester involved in the state’s Group Insurance Commission. He can use this as leverage to effect how the council votes on issues relating to new contracts and health insurance.
Read his, and the rating agencies’ reports here: BondRatingAndOtherFinancialData2010.
Of the three groups Moody’s seemed to have the most criticisms of the city, calling Worcester out on its higher than state and national average unemployment level, that the city had to tap into it’s once-$12 million tax levy to balance the FY11 budget, that state aid will decrease even further, and that assessed property values dropped 10% last year. But even with these factors working against Worcester, Moody’s expressed optimism in the city, citing medium-term developments that have yet to be finalized, such as CitySquare, the CSX expansion and North Main Street’s revitalization.
Look for a wave of praise to come from the council floor next Tuesday night.