Bridgeport’s finances get boost of faith

BRIDGEPORT — City officials — and taxpayers — got some good financial news this week, with two of the three key credit rating agencies boosting Bridgeport’s grades.

The news also comes as Mayor Joe Ganim prepares to run for a third consecutive two-year term in 2023.

In their latest reviews of Bridgeport’s finances, Fitch boosted the city’s rating from A to A+ while Moody’s Investors Service also moved the needle up a notch from Baa1” to A3. The highest achievable rating is AAA.

Meanwhile the third top ratings agency, Standard & Poor’s, held its view of Bridgeport’s finances steady at A.

That may all read like gibberish to some residents, but it ultimately can impact their wallets by potentially saving Bridgeport millions of dollars in interest payments over the long term when officials borrow for big projects like school construction.

“This is an affirmation of the strength of the city’s finances, fiscal health and this change will lead to lower interest costs for our bonding (borrowing), thus saving taxpayers money,” Finance Director Kenneth Flatto told members of the council’s budget committee earlier this week.

He also said it was the first simultaneous ratings increases “in decades.”

“With a better rating, the city is able to go out to borrow on better terms — to get better (interest) rates for borrowing,” Councilman Scott Burns, a budget committee co-chairman, said in an interview Thursday.

This impacts the annual municipal budget and the amount of taxes officials need to raise —

Bridgeport’s 43.45 tax or mill rate is among the highest in the state — to cover operating expenses and long-term debt.

“If the city is showing it’s being fiscally responsible then I would say investors are going to be more likely to say, ‘This is somewhere we want to invest,’” Burns said.

Investment, meanwhile, helps the local economy by growing the tax base and alleviating the burden on homeowners and existing businesses.

Fitch in a statement credited its “one-notch upgrade” to the ongoing improvement of the city’s “financial flexibility since fiscal (year) 2012 and increased reserves levels.” Mayor Bill Finch was in power in 2012, with fellow Democrat Ganim defeating him during a 2015 primary and winning that year’s general election.

“The upgrade also reflects notable improvement in revenue growth prospects from increasing tax base values and changes in state legislation supporting recurring increases in state aid that commenced during fiscal (year) 2022,” the Fitch statement continued.

Moody’s similarly cited a “solid and continued financial improvement highlighted by material increase to cash and reserves.

“We anticipate that the effective budget management that brought about these changes will remain in place and continue to produce moderate but consistent operating surpluses,” read Moody’s press release.

But that same release also noted that while Bridgeport is “an area employment hub” residents have “weak” and “below average” incomes compared to many nearby communities, and local government’s “high long-term liabilities continue to weigh on the rating and drive elevated though manageable fixed costs.”

Those liabilities are highlighted by employee retirement expenses.

In 2018 and 2019 some elected officials and business leaders, concerned about the Bridgeport’s financial outlook and then tax rate of 54.38, were urging a state takeover of the budget. But Flatto fought back against it at that time.

“The city is in very healthy financial condition,” Flatto said during a council hearing on the matter in August 2019.

Burns this week said Flatto, who helped Ganim get elected in 2015 and was subsequently hired to run the finance department, “deserves a lot of credit” for the new bond ratings.

“He’s been pretty smart and taken opportunities to reduce our long-term debts and level out our payments over time, working with the council,” Burns said.