As would any mayor, Bill Finch welcomed the news that Moody's Investors Service improved its outlook for Bridgeport, Conn., to stable from negative.
But the words "diverse commercial presence" jumped out at Finch, whose city, amid a large-scale waterfront redevelopment, plans to sell $75 million of general obligation bonds on Monday.
"It's nice to hear words like that from Moody's," Finch said in an interview in New York. "Diversifying the local tax base is incredibly important."
Moody's, while affirming its A2 rating on a city with $547 million of outstanding debt, cited its expectation that the city's short-term financial picture will stabilize.
"The [city's] ability to maintain structural balance, continue to augment its general fund reserves and correct the internal service funds deficit will be key rating factors in future reviews," Moody's said.
Bond proceeds will fund various capital improvement projects in Connecticut's most populous city. A tax intercept mechanism established in 1996 secures all city GO bonds. Maturities will run from 2017 to 2034.
Standard & Poor's rated the city A. S&P said that while it considers some Bridgeport economic indicators weak - debt service is 9.5% of total governmental funds expenditures and direct debt is 107.1% of total governmental funds revenue — several initiatives could help long-term.
"They continue to record operating surpluses and they're reduced their reliance in cash-flow borrowing," said the city's financial advisor, Public Financial Management Inc. senior managing consultant William Fazioli.
Finch, an area native in his seventh year at City Hall after serving in the state Senate, worked out concession deals with labor unions shortly after taking office that covered half an $18 million budget deficit. Some staff cuts, attrition and other budgetary pruning took care of the rest.
"It took a lot of hard work for more than six years. I walked into $18 million to $20 million of red ink, which a lot of mayors have to do these days," he said. "It's difficult to just do cuts. You can't do them right away. Without givebacks, you just have layoffs."
Pivotal to Bridgeport's ambitious redevelopment program is the 52-acre Steel Point peninsula that will involve $1.2 billion in private investment and $190 million in public money. Outdoor retailer Bass Pro Shops of Springfield, Mo., will serve as anchor, thanks to a $22 million tax increment financing package and an urban development grant-in-aid package that the State Bond Commission approved last fall.
According to Finch, Bass Pro founding chief executive Johnny Morris expects the Bridgeport store alone to draw up to 3 million people per year.
"Johnny Morris was looking down at the site from another building, talking in his Ozark accent," said Finch. "He said 'I have the site, the rail, the highway, the ferries, the people coming in on their boats.'"
The 146,000-population harborside city, 65 miles northeast of New York and 20 miles west of New Haven, Conn., is connected by both Amtrak and Metro-North railroads, Interstate 95, and a ferry to Long Island.
Bridgeport plans to open a second train station at a former Remington Arms site, 1.5 miles northeast of the main station, using a mix of federal and state funding that includes $2.75 million the State Bond Commission approved last month. It will bear the name of showman P.T. Barnum, whom voters elected mayor in 1875.
"They do have a lot of [infrastructure] pieces in place," said Fazioli.
Barnum station, pegged for completion in 2018, would sit near the medical district, which is anchored by Bridgeport Hospital. Officials expect the overall redevelopment to link the waterfront with neighborhoods. I-95 now cuts off the waterfront, including a minor-league baseball park and arena, from the rest of the city. Other components include the Eco-Technology Park, in which the city is collaborating with the private sector for green industries and energy infrastructure development; and the completed $126 million Fairchild Wheeler Multi-Magnet High School, the second of three phases of which are scheduled to open next month.
Challenges still confront Bridgeport.
"We still have a long way to go in areas like pensions and poverty, some of which is above my pay grade," said Finch. He favors condensing some of Connecticut's 169 cities and towns which, among other benefits, would reduce borrowing costs. "We have to consolidate beyond the little town square," he said.
Bridgeport's four single-employer, defined-benefit pension plans combine for a funded ratio of about 75% as of July 1, 2012, but its largest, Public Safety Plan A, is only 44% funded. About half of Bridgeport's debt relates to pension obligation bonds it issued in 2000.
The city occupies only 16 square miles, surrounded by affluent suburbs. Socioeconomically, said Moody's, Bridgeport's equalized value per capita, a proxy for wealth, is merely 40% and 60%, respectively, of state and national medians for municipalities that Moody's rate. Unemployment and poverty rates are 10.6% and 18.4%, respectively, exceeding Connecticut and the nation.
Finch, a member of the U.S. Conference of Mayors, attended the inaugural meeting of the group's Cities of Opportunity Task Force in New York on Monday.
William Blair & Co. is lead manager for the sale. Pullman & Comley LLC is bond counsel. Updike, Kelly & Spellacy PC is representing the underwriters.
