By KAITLYN NAPLES
At last week’s council meeting, Plainville’s financial advisor Barry Bernabe from Webster Bank presented the town’s credit rating overview.
According to Moody’s, a credit rating agency, Plainville ranks in the Aa3 category, which is four credit ratings away from the very highest. Under Standard & Poor’s rating scale, Plainville’s rating would be the equivalent of a AA-.
The rating categories take into consideration management practices, economy and demographics of the town, financial performances— such as the consistency of the town’s Fund Balance for example— debt management, and long-term liabilities, like pensions.
Plainville Town Manager Robert Lee said a credit rating typically comes into play when the town is ready to borrow money. As far as the town’s rating, Lee said it has been the same since he has been town manager and said he “thinks it is appropriate,” especially since the town’s fund balance is nearly $6 million, when it has been in the downward direction for the last few years.
Lee said the credit rating is comprised of “things we can and can’t control.” Things that the town can’t control are the demographics of the community, and things such as the salaries of residents and housing sales in the town. The municipal government can control the way it handles its finances, such as how much is spent and how much is kept in reserve.
“I think overall we are doing a pretty good job on our part,” Lee said, adding that Plainville is a blue collar community, and will always pay back what it borrows. The credit rating is part of the preparation to potentially borrow. However, the borrowing may come into play for projects that are in the future of the municipality, and nothing on the immediate horizon.
Lee also said 80 percent of town’s debt will be paid off in 10 years, and said the borrowing is planned so it hits the budget when debt service is getting lower.
“We are paying off our debt a lot faster than other communities” that are in the same Aa3 category, Lee said, adding this is seen as a positive thing for the municipality’s credit rating. Even though the town’s debt per capita is higher than other communities, Lee said the town’s existing debt service is very strong, as described in the credit rating summary. The town has the highest fund balance it has had since 2006. Much of the current debt has been for schools and sewers, with another smaller chunk going to general purposes, according to the report.
According to the report, long-term interest rates are increasing, however they are still at historically low levels. The report also said the town’s tax base is diverse with the top 10 taxpayers making up about 10 percent of the grand list. The report also described that the town’s Grand List decreased about 4.6 percent during the last revaluation in 2011, which was lower than many other communities. However, “the average annual growth has been relatively modest.”
Future projects under consideration for Plainville that may require taking on more debt include overdue paving projects, projects at Wheeler Elementary and the Plainville High School, and the proposed demolition of the old Linden Street School. Those costs are expected to increase in the wake of discovery there is asbestos in the building.
At last week’s council meeting Lee said consultants found more hazardous materials in Linden Street. The estimated removal would cost $1.4 million. The subsequent demolition would cost about $1 million. He said if the building were to be renovated, those hazardous materials would still have to be removed. Renovations, according to a report done in 2010 by JCJ Architecture, are expected to cost between $4.4 million to $6.3 million. He said the cost of asbestos removal is an estimate.. Lee said the town should pursue state or federal funding to assist in the removal process.
Last year, the Old Linden Street School Study Committee recommended demolition the old building, as it is not suitable for school use. Civic groups did not want to take responsibility for the building, which would cost about $2,000 per month just to maintain.
The Council approved a motion to seek grants for the removal of the hazardous material for the demolition of the old Linden Street School.
Also at last Monday’s meeting, the Council approved a motion to take over administrative duties regarding the Plainville Affordable Housing Corporation. The corporation, which was established in 1990, helps provide housing for moderate and low income residents.
Back in November, the corporation was looking to disband because they had been unable to find new board members to manage the responsibilities. Since 1990, the corporation renovated 32 homes that formerly housed military families on Cassidy Drive, and then developed 21 new homes located on Bruce, Franklin, and Burnham Streets.
Comments? Email knaples@BristolObserver. com.
By KAITLYN NAPLES