HAMDEN — The town has obtained low interest rates on bonds it has sold for various projects.
Acting Finance Director Jennifer Charneski said the town received a 0.60 percent interest rate on a $30 million one-year note, a 3.72 percent rate on a $12.2 million tax-exempt bond issue, and a 5.09 percent rate on a $4 million taxable bond.
“We were really pleased. It’s a sign people are confident with our rating,” Charneski said.
About $20 million of the $30 million note will provide cash flow for the first year of the Memorial Town Hall renovation project. The project also includes a police station addition and the refurbishment of Station 4, the fire house which adjoins the town hall at Whitney and Dixwell avenues. The rest of the notes will cover other approved capital projects, she said.
The tax-exempt bond issue includes $2.2 million in pre-construction expenditures for the town hall project and other capital projects, Charneski said.
The taxable bond of $4 million covers a portion of the purchase of the 11-acre Dadio Farm. Investors are paying the taxable rate had to be applied because the town sold three of the four lots at the Putnam Avenue site to private concerns for the expansion of the adjoining industrial park.
The fourth lot was being reserved for a town fire headquarters.
The bonds and notes were competitively sold last week at Webster Bank in Hartford, under the direction of town financial adviser Barry Bernabe and attorney David Panico of Robinson & Cole, the town’s bond counsel.
Mayor Craig B. Henrici said the good news about the bond sale supplements other financial good news the town has received in recent weeks.
Two New York rating agencies, FitchRatings and Standard & Poors, have given the town bond ratings of A+.
“We’re very proud to be upgraded in the worst economy in 80 years,” Henrici said.
With respect to the town hall renovation, town officials estimate there will be a $1 million savings on financing over 20 years because of the low interest rates the town will be able to attain as a result of its improved bond rating. They estimated more will be saved on the other projects because of the low interest rates.
The town had to obtain new bond ratings because of the bond and note sales for the town hall and other projects.
Economic and Community Development Director Dale Kroop said the rating agencies were interested in brownfields that were being converted to housing and about projects that would result in more tax revenue for the town, such as the expansion of Quinnipiac University and Whitney Center.
Tuesday, August 18, 2009
Monday, August 03, 2009
Hamden bond rating climbs to a stable A+
By Ann DeMatteo, Assistant Metro Editor
HAMDEN — Officials were all smiles Thursday when they learned the town’s bond rating went up a step.“It went up from A with a positive outlook to A+ and stable. It’s fantastic. It’s great news in a recession and for going to the bond market,” said Mayor Craig B. Henrici.
Henrici said he learned of the upgrade Thursday afternoon from the town’s financial adviser, Barry Bernabe, vice president of government finance for Webster Bank.Standard & Poor’s delivered the news to Bernabe, the result of a teleconference Henrici, Bernabe and other town officials had Monday with Standard & Poor’s.Bernabe said he worked closely with Henrici, acting Finance Director Jennifer Charneski, Chief Administrative Officer Scott Jackson and Economic and Community Development Director Dale Kroop on the rating presentation.A rating is necessary before a community plans to borrow money, according to Bernabe and Charneski. Another rating agency will hear the presentation Tuesday, he said.
According to Charneski, the town will receive bids on bonds and notes Aug. 12 for the $36.35 million Memorial Town Hall, police station and fire station renovation project. Jackson said 115 vendors have obtained bid packages. The bids were to be opened Thursday, but because the town and agents for the project are in the middle of answering questions from potential bidders, the bid opening was postponed to Aug. 13.Charneski said the town will take out long-term bonding of $2 million for money already spent on preconstruction work involving the Town Hall project. Then, the town will take out $21.5 million in one-year notes for the first year of construction, based on the estimated cash flow.Also in August, the town will seek bonding on some capital improvement projects from fiscal 2006-07 and 2007-08, including purchase of the Dadio farm on Putnam Avenue.
The highest rating given is AAA. There are three AA ratings, followed by an A+ and below.Rating agencies look at demographics, the management team, a municipality’s debt position and financial performance before issuing ratings.Bernabe said Standard & Poor’s said Hamden had a low debt burden with a faster than average debt amortization. The town has $78 million in debt.Hamden had a AAA rating about 15 years ago, but demographics have changed, meaning wealth levels based on per capita income have dropped over the last 20 years, Bernabe said.The rating agency said the town’s fund balance is adequate, but it would like the town to increase its fund balance, which is now at 4.4 percent, or $7.7 million, of a $176 million budget.“They like to see 5 percent or higher,” Bernabe said.Republican mayoral candidate Ron Gambardella welcomed the improvement in Hamden’s bond rating, but disagrees with the method of achievement.“The Henrici-Jackson administration has obtained this rating off the backs of the taxpayers as a result of three consecutive tax increases,” said Gambardella, saying that he fears a “financial tsumani” without a change at the top.
Jackson, who is running for mayor and is being challenged in a September primary by Councilman James Leddy, said that it was “extraordinary” that the town would get a rating increase in such a bad economic climate and that the town will save a lot of money in bonding because of it.Leddy could not be reached late Thursday.
HAMDEN — Officials were all smiles Thursday when they learned the town’s bond rating went up a step.“It went up from A with a positive outlook to A+ and stable. It’s fantastic. It’s great news in a recession and for going to the bond market,” said Mayor Craig B. Henrici.
Henrici said he learned of the upgrade Thursday afternoon from the town’s financial adviser, Barry Bernabe, vice president of government finance for Webster Bank.Standard & Poor’s delivered the news to Bernabe, the result of a teleconference Henrici, Bernabe and other town officials had Monday with Standard & Poor’s.Bernabe said he worked closely with Henrici, acting Finance Director Jennifer Charneski, Chief Administrative Officer Scott Jackson and Economic and Community Development Director Dale Kroop on the rating presentation.A rating is necessary before a community plans to borrow money, according to Bernabe and Charneski. Another rating agency will hear the presentation Tuesday, he said.
According to Charneski, the town will receive bids on bonds and notes Aug. 12 for the $36.35 million Memorial Town Hall, police station and fire station renovation project. Jackson said 115 vendors have obtained bid packages. The bids were to be opened Thursday, but because the town and agents for the project are in the middle of answering questions from potential bidders, the bid opening was postponed to Aug. 13.Charneski said the town will take out long-term bonding of $2 million for money already spent on preconstruction work involving the Town Hall project. Then, the town will take out $21.5 million in one-year notes for the first year of construction, based on the estimated cash flow.Also in August, the town will seek bonding on some capital improvement projects from fiscal 2006-07 and 2007-08, including purchase of the Dadio farm on Putnam Avenue.
The highest rating given is AAA. There are three AA ratings, followed by an A+ and below.Rating agencies look at demographics, the management team, a municipality’s debt position and financial performance before issuing ratings.Bernabe said Standard & Poor’s said Hamden had a low debt burden with a faster than average debt amortization. The town has $78 million in debt.Hamden had a AAA rating about 15 years ago, but demographics have changed, meaning wealth levels based on per capita income have dropped over the last 20 years, Bernabe said.The rating agency said the town’s fund balance is adequate, but it would like the town to increase its fund balance, which is now at 4.4 percent, or $7.7 million, of a $176 million budget.“They like to see 5 percent or higher,” Bernabe said.Republican mayoral candidate Ron Gambardella welcomed the improvement in Hamden’s bond rating, but disagrees with the method of achievement.“The Henrici-Jackson administration has obtained this rating off the backs of the taxpayers as a result of three consecutive tax increases,” said Gambardella, saying that he fears a “financial tsumani” without a change at the top.
Jackson, who is running for mayor and is being challenged in a September primary by Councilman James Leddy, said that it was “extraordinary” that the town would get a rating increase in such a bad economic climate and that the town will save a lot of money in bonding because of it.Leddy could not be reached late Thursday.
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