I am very pleased to report that Moody’s Investors Services affirmed Lowell’s long-term bond rating of A3 and removed the city’s negative outlook, particularly in such a precarious time for our local, state and national economy. Moody’s stated that the rating “reflects the city’s improving financial position, which remains strained but has begun to stabilize after several years of reserve draws.” This is important because a negative outlook means that a cut in bond rating is more likely than an upgrade. “Removal of the negative outlook reflects the city’s progress in effectively reversing the city’s decline through implementing financial policies and generating positive operating results in fiscal 2007,” reports Moody’s.
Moody’s praised the management team’s thorough review of the city’s finances and long-range financial forecasts. The rating analysts were encouraged that Lowell has identified its capital needs and has presented a plan to fund them. Notable is Lowell’s intention to time new investments to existing debt retirement.
Lowell’s sizeable tax base also influenced their rating. Moody’s is optimistic that the Hamilton Canal project will add new revenues over the longer term. The Hamilton Canal project is seen as a logical extension of recent downtown improvements. They also value the presence in Lowell of higher educational institutions.
Many challenges remain, the most important of which is to rebuild financial reserves. Also of importance is the City’s ability to maintain positive operations. However, the investment community recognizes that Lowell has reversed its course, and has confidence in our ability to sustain this momentum.
A full text of Moody’s report is available on the city’s website here.
Congratulations on the improving report! Like a great ship, the City will be slow to turn, but once started it should create its own inertia to continue on a better path.
But it appears that we will be borrowing up to another $35M for waste-water facility improvements, and that is in addition to CSO and other borrowing. Why don’t we push for federal assistance on these, if not under Bush, when Obama gets elected. Instead of spending $10B a month in Iraq, half that would go a long way to improving both our infrastructure and economy if spent here. We shouldn’t take “no” for an answer, as it is our money that is being wasted.