|Easton Mayor Sal Panto, City Administrator Glenn Steckman, and Finance|
Director Chris Heagele talk about the recent upgrade the city received in
its bond rating from Standard & Poor's Financial Services.
Joined by City Administrator Glenn Steckman and City Finance Director Chris Heagele at a press conference this afternoon, Panto said Standard & Poor has assigned the city an "A+" rating, an upgrade of two steps from the "A-" rating it held previously.
The upgrade is the third change in about as many years, as the city moved from a "BBB-" to a "BBB" rating in 2010, and again saw an increase to "A-" status about a year and a half ago.
The rating change will mean the city is in a better position when it comes to an expected bond auction it plans to hold later this week to finance the new city hall and transportation center, and grant $1 million to the Greater Easton Development Partnership to purchase the former Weller Center on Northampton Street to house an indoor farmers' market , as well as fund additional police and fire department training.
While a lot of how much the bond issue will ultimately cost is dependent on interest rates on the day of the sale, the better S&P rating means the city will be eligible for better rates and pay less in bond insurance, city officials said.
"As we market our city...seeing a stable condition, which is an unusual circumstance in a third-class city, this is a good thing," Heagele said. "What a high rating to me means is that...we manage our cash well, and I think that's a good indicator to investors."
S&P ratings are usually issued every two to three years and also when a municipality plans to take out a bond, as was the case this time, Heagele said. The report from the ratings firm upgrading Easton's outlook was issued on Sept. 27.
Panto said the rating increase may also attract more investors to Easton.
"This is going to bring people to our city," he said. "The bond rating tells people this is a really good place to invest."
Still, while it's good news, people shouldn't take the "A+" as a sign that the city has lots of extra cash, he cautioned.
"This doesn't mean we're flush with cash," he said of the rating bump. "We still have pension issues. They're not going away."
Panto reiterated his belief the city needs to increase the Earned Income Tax for residents by 0.2 percent in 2014 to cover rising expenses.
"The rating specifically looks at how well a city manages the money it has," he said, noting that municipal expenses, particularly pension costs, continue to rise, and other costs the state once covered have been pushed back onto the city too.
"It's tough to make financial decisions for the long term, not the political term, but cities get it. Washington doesn't," the mayor said, referring to the ongoing federal government shutdown. "Washington can't even pass a budget, let alone a balanced budget, and the state is getting nearly as bad."
Steckman echoed the sentiment.
"Costs are still rising...so we're fighting our way up the hill like Sisyphus," he said. "We need to keep getting ready to climb up the hill."
But still, the new rating is good news for the city, Panto said.
"Improving our bond rating and achieving an "A" rating has always been a goal of this administration," Panto said. "We've been working hard. The word is out--Easton is a good investment."