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West Chester again earns top bond rating
Moody’s Investors Service once again issued Aaa bond rating for West Chester Township. West Chester was assigned the highest rating possible due to its large and increasingly diverse tax base driven by substantial economic development; healthy financial operations supported by strong operating reserves and dedicated voted levies for core services.
The bond rating was announced as West Chester prepares to issue $14 million in Road Improvement General Obligation Limited Tax Bonds to fund a portion of the transformation of the Union Centre Boulevard Interchange to a Diverging Diamond Interchange (DDI). This top ranking benefits taxpayers by securing the best possible interest rate on its bonds which are backed by Tax Increment Financing funds.
West Chester’s growing economy and tax base, healthy financial position and manageable debt burden were cited as attributes warranting the highest available bond rating. West Chester was first awarded the Aaa rating in 2010.
While West Chester’s economic tax base is diverse, it is substantially driven by advanced manufacturing in fields such as biochemical, additive engineering and 3-D printing, and fabrication.
“West Chester has sufficient funds to pay for the DDI project without issuing debt. For a project that will offer benefit for the next 20 to 25 years, however, it makes sense to spread the cost over time,” said Finance Director Ken Keim. “The Township’s management of cash and debt help to earn the Aaa bond rating and interest paid on the bonds over time may be offset by the interest that can be earned by preserving cash balances.”
Prudent and consistent financial management, including budget carryovers, reserve funds for individual departments and conservative spending, have also contributed to the exceptional rating.
“West Chester Township has developed fiscally responsible borrowing practices over the years and earning the Aaa rating again is a credit to all of those who continue to work so diligently to identify efficiencies within our Township operation and to remain responsible stewards of taxpayer dollars,” said Township Administrator Larry D. Burks.
The Township doesn’t borrow against speculative development in its TIF districts and makes conservative estimates for future TIF revenue growth.
To hear more about the Aaa bond rating, tune to Elected Official Comments from the Board of Trustees meeting of March 26 (starts at 1:25:52).