Moody’s improves City of Claremont bond rating

By GLYNIS HART
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CLAREMONT —The administration of the City of Claremont happily reported Wednesday that Moody’s Investors Service has upgraded Claremont’s credit rating to A1 from A2. Moody’s is considered one of the big three credit rating services in the country.

“It’s an example of a trend in a positive direction,” said city manager Ryan McNutt. 

“The upgrade is a testament to the city’s excellent fiscal management, proactive reserve polices and commitment to long-term planning,” said McNutt. “We are very fortunate to have a tax base that is growing more diverse and a strengthening of the fiscal polices as undertaken by the city council.”

The city recently made changes in policy that have affected its bond rating. 

Claremont city officials set in place a fund balance policy, requiring that the fund balance be within 15 to 20 percent of general revenues. It also changed its fiscal year end; formerly, Claremont used the calendar year, which is out of step with most municipal budgets, McNutt explained. 

“Ninety-nine percent of the world uses July 1 to June 30 as its fiscal year,” said McNutt. Now Claremont will, too. 

 The city also moved to quarterly tax billing.

According to a press release from the city, “The upgrade to A1 reflects a strong reserve position, solid operations, and elevated but manageable debt burden and pension obligations, which are supported by conservative management and recent policy changes.”

In December 2010, the city had its rating downgraded from A1 to A2. Moody’s recent review of the city’s bond rating is the first evaluation of Claremont’s fiscal health by one of the major credit rating agencies since that time. 

“The establishment of the Finance Committee in 2017 provided the city council and administration the opportunity to conduct in-depth discussions on fiscal-related matters,” said Mayor Charlene Lovett. “This has resulted in either improved or new fiscal policies that have directly contributed to Claremont’s upgraded credit rating.”

This rating increase found evidence that the overall tax levy will improve over the next several years, thanks to new residential and commercial developments. A new Harbor Freight store opened recently, as did a new Hobby Lobby on Washington Street. Additionally, the Ford and Subaru dealerships on Charlestown Road are building new facilities or renovating existing facilities to accommodate expansion. Lastly, a number of smaller businesses are growing or have relocated to the city.