New Haven Independent

In February Standard and Poor’s Rating Services unexpectedly raised Branford’s credit rating from AA+ to AAA, based on the town’s consistent favorable financial performance, strong and stable revenue source and strong financial management. The upgrade will place the town in a strong position once the economy rebounds. (A town’s rating is not a reflection of its wealth.)

The upgrade makes Branford only one of 10 municipalities out of Connecticut’s 169 cities and towns to be rated AAA; Branford has the lowest household income of any of the towns with the AAA rating.

At a recent Chamber of Commerce State of the Town breakfast, Don Klepper Smith, chairman of the Governor’s Council of Economic Advisors, described Branford as a “well-managed municipality.” He added that Branford is “really to be commended for achieving the AAA distinction.”

“Branford is in better shape than most towns,” says First Selectman Anthony “Unk” DaRos. “We’ve been doing this a long time and the credit goes to Jim Finch, his department and the Board of Finance.”

In his annual state of the town address, delivered at the breakfast, DaRos did note that not all was rosy. He said so far this year, “our tax collection rate is down. We are 1.5 percent behind last year at this point in time and we are making every effort to bring it up.”

There’s a higher demand for AAA rating because it saves towns money on interest.

S&P also assigned its AAA standard long-term rating to Branford’s series 2009 general obligation refunding bonds, which total $11.4 million. The improved rating will enable the town to save around $500,000 on refinancing its bonds.

Finance Director Jim Finch attributed the higher rating to a conservative budget philosophy.

Finch said the town has tried to address longer-term liabilities, such as pensions and their associated health care costs, by properly funding them on an ongoing basis and leveling their costs, instead of under-funding them and saving money short-term.

The upcoming budget, recommended by the Board of Finance, stands at almost $89 million. Finch expects reduced revenue from building permits and has budgeted for lower collection rates. As proposed, next year’s budget shows spending growing 1.34 percent.

All town budgets are lower than the current year except for an increase in the education budget. DaRos commended the town hall departments “that kept their budget requests flat as we requested.”

Tough economic times mean it’s important to have reserves and flexibility. In Branford’s case that means having funds to cover costs that may come from capital projects and the Tabor Drive eminent domain case now pending before the State Supreme Court in Hartford.

Branford’s favorable S&P rating was based, in part, on strong reserves, which have averaged more than 16 percent of expenditures over the past five years.

However, Finch said a lot of Branford’s capital projects are on a “pay as you go basis,” funded through the regular operating budget.

Finch said that Branford is not as reliant on state aid as many municipalities, According to the S&P report, property taxes generate 87 percent of total general fund revenues, while state aid provides only 7 percent.

While DaRos’s goal had been for zero tax increases, the budget approved by the Finance Board came in at a mill rate of 23.7, an increase of less than a half a mill. It could go lower if the Representative Town Meeting decreases it. Finch said there will be no dramatic reduction of town services.

“We want to make sure that residents have a roof over their heads and are eating,” said DaRos, noting the increased use of town services. “We don’t want to cut back on services and the social service departments will be kept intact.”

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