Thursday, April 25, 2024

Cambridge police headquarters, called the Robert W. Healy Public Safety Building, are among five projects paid for by the sale of city bonds and enabled by the city’s high credit ratings.

Cambridge has earned the highest possible credit score, AAA, from the nation’s credit rating agencies, and for the 11th year in a row.

The score, from Fitch Ratings, Moody’s Investors Services and Standard & Poor’s, was announced Monday by City Manager Robert W. Healy, who was heaped with praise by member after member of the City Council.

After citing the laudatory words of the rating agencies — “exceptional fiscal management” stands out — councillor David Maher said, “It’s not too often we stop and say thank you and how pleased we are for [for your work]. This is one of those evenings, mister manager, when you and your team should take the accolades, because it’s been good work, it’s been consistent work, and we are extremely grateful as a community for the stewardship and your leadership.”

There are only 22 other cities in the United States that share the agencies’ combined top rating, including such communities as Boca Raton, Fla., and Santa Monica, Calif., and councillors took note.

“It may seem as it we don’t notice this from time to time, but we are well aware that we are well served by the management team and the city manager and that in particular we are well served financially, and this is the thing that makes it possible to run our schools, to have the kinds of programs we have for senior citizens, to move on the kind of housing things we do and open space, all because we are able to have this solid financial base,” councillor Henrietta Davis said. “You and your team deserve a great debt of gratitude for all the work that you’re doing. Thank you so much.”

Communities sell (or, actually, loan out) bonds to pay for large projects, promising to pay interest and, when the bond expires, return the what the buyer (or borrower) paid.

Of the city’s current debt load, 77 percent will be retired within 10 years, Healy confirmed after a question from councillor Sam Seidel. Although new debt will be incurred as older debt is paid off, Seidel called the rapid payback “striking.”

The higher the bond rating, the better investors feel about their chances of getting their interest on time and money back, so top scores make Cambridge offerings appealing. This will be tested Tuesday, the sale date on the city’s next issue of bonds. Healy said about $33.2 million worth would be sold.

At the same time, because Cambridge doesn’t have to pay out high interest to attract investors, the city will save $900,000 in payments on the issue, Healy said. “That’s real money that’s not going out the door,” he said.

Because the property tax rate needn’t be raised as much as in other communities to pay for projects or services, Maher said, there’s been only a 3.8 percent average rise in taxes over the past five years, with about 80 percent of residents either paying less, going without a change or facing a hike of less than $100 during that time.

Meanwhile, Maher said, with a top rating since 1999 the city has been in a good position to raise $260 million in property tax-supported debt for: renovations of Cambridge Rindge & Latin School and the War Memorial Recreation Center; an addition and renovation at the Main Library; and building the Russell-West Cambridge Youth & Community Center and police headquarters, which is called the Robert W. Healy Public Safety Building.

The fiscal stability also makes it easier to budget, he said.

That will remain important as state aid to cities and towns decreases in tight fiscal times. Healy said there has been a $9 million decrease within three years, to about $37 million in the current fiscal year. Federal money, which tends to be earmarked for specific programs such as education or subsidized housing, is also decreasing.

“The manager really manages the money quite well, and we’re smart enough to stay out of his way,” councillor Craig Kelley said, “for the most part.”

Another kind of green

The council also asked Healy to quickly prepare a plan to cut municipal energy use by 20 percent within five years, making the city eligible for “Green Community” grants and loans. Having a plan in place would allow pursuit of a $1 million block grant that would help the city pay for such steps as installing solar panels.

The 20 percent is achievable, Davis said. The federal government is seeking to cuts its energy use 28 percent by 2020, and Harvard plans to cut its use 25 percent within four years. City Hall has seen a 5 percent decrease in less than a year, which Davis attributed to such simple steps as putting up posters reminding people to be conscious of their energy use.

But some residents urged more action and less complacency by the council and city government.

“We know by now that setting goals over that length of time without annual reduction goals is setting ourselves up for failure,” Steve Wineman said. “I suggest your resolution also require the city manager to set annual goals and make adjustments if, year by year, the city isn’t meeting those goals.”

Wineman also wanted the wording of the resolution changed to say 20 percent was a minimum reduction, not the goal itself, and resident Kathy Podgers agreed the goals and phrasing of the resolution “are just pathetic.”

The council did not change the wording of the resolution.