Standard & Poor's Ratings Services said it raised its rating on the town of Tewksbury, Mass., general obligation bonds to AA-plus from AA.
"We base the upgrade on sustained positive operating performance and the town's formal adoption and integration of key financial management policies," said Standard & Poor's credit analyst Christina Marin.
At the same time, Standard & Poor's assigned its AA-plus long-term rating to the town's series 2015 GO bonds. The outlook for both ratings is stable.
A pledge of the town's full faith and credit, subject to Proposition 2 1/2 limitations, secures the bonds. Proceeds will be used to undertake major renovations on the town's water treatment plant and refund 2006 bonds for a net present value savings of $650,000.
The rating reflects S&P's assessment of the following factors for the town: very strong economy, with access to a broad and diverse metropolitan statistical area; very strong management, with "strong" financial policies and practices; strong budgetary performance, with balanced operating results in the general fund and at the total governmental fund level; strong budgetary flexibility, with an available fund balance in fiscal 2015 of 9.5% of operating expenditures; very strong liquidity, with total government available cash of 30.6% of total governmental fund expenditures and 8.4x governmental debt service, and access to external liquidity considered strong; adequate debt and contingent liability position, with debt service carrying charges of 3.7% of expenditures and net direct debt that is 84.6% of total governmental fund revenue, as well as low overall net debt at less than 3.0% of market value and rapid amortization with 71.1% of debt scheduled to be retired in 10 years, but a large pension and other postemployment benefit liability and the lack of a plan to sufficiently address the obligation; and strong institutional framework score.
