In Sluggish Economy, Windsor 'Doing Well,' Says Souza

Moody's Investors Service .

Despite Moody's action, Windsor Town Manager Peter Souza is optimistic about the town's financial future, and he's hopeful the ratings agency's actions will have a limited impact on municipalities.

"Although we are linked in a number of ways to the state, we are rated primarily on our own merits," Souza said, adding that "the downgrade may bring a bit more attention or scrutiny from the rating agencies during their next review" of the town.

In November 2011, Windsor's AAA bond rating, the highest rating possible, was upheld and affirmed by Standard & Poor's.

"We are doing well considering the sluggish economy and the various unexpected expenditures related to the storms [of 2011]," said Souza.

The town expects to receive federal reimbursement for funds related to storm response at roughly 70 to 75 percent, but it is the revenue side of things, not spending, that could create some major question marks as the budget process continues.

The big questions, which have yet to be answered, are exactly how Gov. Dannel Malloy and state legislators will react to the state's downgrade, and to what extent their reaction will affect Windsor tax payers.

"It truly depends on how the governor and general assembly approach the challenge of funding long-term issues such as under-funded pension and health insurance liabilities and statewide infrastructure needs," Souza said of the downgrade's potential impact on local funding provided by the state.

To date, Souza explained, Windsor has been able "to weather turbulent financial times as a result of good long-term planning as well as continued cost containment efforts.

"Our planning efforts, quality service levels and infrastructure improvements have all contributed to promote private investment in town, resulting in a very diverse tax base with a wide range of small and large employers."

While Moody's cited the state's depleted reserves and a heavy debt load as reasons to justify the downgrade, Windsor has a number of factors working in its favor.

According to Souza, the diversity of the town's tax base, reserve levels that "are roughly 15 percent," "low to moderate" debt per capita, a pension plan that is 100-percent funded, and the fact that the town has paid off over 70 percent of its debt in fewer than 10 years are all factors taken into account by Standard & Poor's, and have all contributed to the maintenance of Windsor's AAA bond rating.