TA Blog: Littleton's AA stable bond rating affirmed

Announcement from the Town Administrator issued on November 28, 2012; updated March 27, 2013.

Standard & Poor's affirms Town of Littleton's AA stable bond rating: "strong" financial position & management practices; SP-1+ short-term rating

UPDATE - On March 27, 2013, Standard & Poor's Ratings Services assigned its 'SP-1+' short-term rating—its highest—for Littleton, Massachusetts’ upcoming $5.3-million sale of General obligation (GO) bond anticipation notes (BANs).  At the same time, Standard & Poor's affirmed its 'AA' long-term and underlying ratings, with a stable outlook, on the town's GO debt outstanding. The rating again notes Littleton’s “Consistently strong financial reserve position, coupled with strong financial management practices and policies.”  Read more.

On November 27, 2012, Standard & Poor's Ratings Services assigned its 'AA' long-term rating to Littleton, Mass.' general obligation (GO) bonds series 2012. At the same time, Standard & Poor's affirmed its 'AA' underlying rating (SPUR) on the town's existing GO debt. The outlook is stable. The rating, in S&P's opinion, reflects the town's:

  • Favorable location at the intersection of Interstate 495 and Massachusetts Route 2, with direct commuter rail service to downtown Boston; 
  • Very strong income and extremely strong property wealth levels; 
  • Consistently strong financial reserve position, coupled with good financial management practices and policies; and 
  •  Low-to-moderate overall debt burden, net of school building aid and self-supported enterprise debt.

The Standard & Poor's rating report indicated, "We view Littleton's financial position as strong as the town historically maintains available fund balance above 8% of expenditures. For fiscal 2013, management adopted a balanced budget and plans to use $689,000 of its fund balance for one-time capital expenditures. For fiscal 2012, unaudited results showed a general fund operating surplus, increasing the total fund balance by about $2.0 million. The town's fiscal 2011 general fund, which under Governmental Accounting Standards Board (GASB) 54 included stabilization funds, increased $3 million primarily due to conservative budgeting and policies restricting 10% of the new revenues not to be appropriated to the operating budget. Property taxes remain the town's primary revenue source, accounting for 71% of general fund revenues followed by state aid receipts at 12%."

"Standard & Poor's revised Littleton's management practices to 'strong' from 'good' under its Financial Management Assessment (FMA) methodology. A strong FMA indicates that practices are strong, well embedded, and likely sustainable. The revision was related to management's consistent adherence to its formal policies and implementation of a detailed capital improvement plan. Management uses historical data, the current budget, and five years of operating revenue and expenditure and capital expenditure projections when compiling its budget. Management also has a goal of maintaining at least 2.5% of expenditures in its undesignated fund balance under GASB 54. Littleton has a formal long-term financial plan, with projections of revenues and expenditures through 2018. Management adopted an investment policy mirroring the state's guidelines and reports earnings to management on a quarterly basis. Finally, the town maintains a debt management policy stating that debt service for nondedicated revenue-supported debt (debt that is neither self-supporting nor excluded from Proposition 2 1/2 levy limits) be no greater than 10% of total budget."

Congratulations on this accomplishment to the Town of Littleton's "strong" finance team.

Thanks go, as well, to the Board of Selectmen and Finance Committee for their policy leadership; and to all of the Town's boards and departments for their efforts and support.

Keith A. Bergman, Town Administrator


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