New London – The city is celebrating two pieces of positive financial news this week: a stronger bond rating and a further increase in the city’s Grand List.
Standard & Poor’s Global Ratings, one of three major rating agencies, has upgraded the city’s rating from A+ to AA-, a move that will result in lower interest rates when the city borrows money.
“The one-tier upgrade reflects a proven trend of improved financial performance, supported by strengthened fiscal policies and practices and a solid expansion of the city’s tax base, including a 3.8% compound annual growth of the Grand List in recent years five years,” said February 24. 28 reporting states.
The S&P report credits the city with attempts to diversify and expand its tax base, conservative fiscal management and an increase in the city’s reserves or fund balance in recent years.
New London finance director David McBride said the city is already reaping the benefits of the new rating. The city this week completed the sale of $13.8 million in bonds and will save $345,000 over the 10-year life of the loan due to the lower interest rates on offer.
Mayor Michael Passero said in a statement the improved bond rating is a testament to the good work and dedication of all departments.
“It proves that we are on the right track now and that if we stay the course, our future looks bright. The Treasury Department’s work was specifically commended in this report for its ongoing efforts to maintain the city’s financial health,” said Passero.
According to the S&P report, the city ran a $425,000 surplus last year, the ninth consecutive year in surplus. The city also increased the amount of money in its fund balance, or rainy day fund, which reached $15.6 million at the end of fiscal 2021.
Passero said he is working on developing a budget proposal for the city council later this month, aiming to have a fourth straight year of a decline in the city’s tax rate.
Those efforts may be helped by this week’s news that the city’s major list of taxable properties has increased by 5.5%. The big list was up 9%, or $38.6 million, in commercial property values.
City Assessor Donna Ralston said $11 million of the increase in commercial real estate was the result of 10% penalties for assessing accounts that failed to file statutory income and expense statements that were due last June.
She said several large projects were either started or completed over the past year, including those at Howard Street, at Electric Boat, 389 N. Frontage Road and 89 Viets St.
Passero said the rise in commercial property values shows the city is making progress in efforts to attract new businesses to the city.
Felix Reyes, director of the city’s Office of Development and Planning, said he’s pleased his department’s work is paying off.
“This increase shows that our work in telling the story of opportunity in the city is being heard by developers and the business community at large,” Reyes said in a statement. “By continuing to work to increase the value of real estate, we are also laying the foundation for fiscal health and continued growth in the future.”
New London Grand List up 5.46%
New London — The city’s big list of taxable properties rose 5.46% in 2021, with the largest increase being in commercial properties.
Total taxable real estate, automobiles, and personal effects as of October 1, 2021 was $1.59 billion, up $82.67 million from 2020. Electric Boat remained the city’s largest taxpayer, making it 5 .9% less on the big list.
Real estate rose 3.3% from $1.23 billion to $1.27 billion. Commercial real estate rose 8.9% from $430 million to $469 million. The number of commercial accounts rose from 848 to 889. Residential properties increased by 0.5%. Motor vehicle values rose 27% to $32.4 million, in line with typical statewide increases, said New London appraiser Donna L. Ralston. There were 16,294 motor vehicle accounts in this latest report, up from 15,989 previously.
Top 10 Taxpayers:
1. Electric Boat Corp., $94.1 million.
2. Yankee Gas Services Co., $43.5 million
3. Connecticut Light & Power (Eversource/DOT/Amtrak), $37.3 million
4. Cedar PCP – New London LLC (New London Mall), $23.8 million
5. Vesta Winthrop LLC (Huntington Street Apartments), $18.2 million
6. Ocean Beach Apartments LLC, $16.9 million
7. Ansonia Acquisitions I LLC (Hawthorne Drive Apartments), $16.3 million
8. Renaissance City Development Association, $16.1 million
9. New London Shopping Center LLC, $12.6 million
10. Mohican Historic Preservation LLC, $8.5 million