CITY JUMPS TWO BOND RATINGS IN STRONG REPORT FROM STANDARD & POOR’S

 "Standard &

Poor's upgrade of our bond rating affirms that our approach is the right

approach, balancing conservative budgeting with ongoing strategic investment in

our community and a long-term development vision laid out in SomerVision," said

Mayor Joseph A. Curtatone. "If these bond ratings seem arcane, here's how it

directly affects each and every one of our taxpayers: It saves you money. This

past year, the two winning bids for the sale of our short-term bond

anticipation notes came in with net interest costs of .15 percent and .19

percent. This latest report from Standard & Poor's means we will continue

to receive phenomenally low interest rates. Investors are willing to loan us

money at almost no cost because they believe in us and want to invest in us.

And that makes it that much more affordable for us to invest in our schools,

parks, infrastructure and affordable housing."

The report issued on March 13 specifically cites the City's

strong management conditions and prudent budget performance, with the City

realizing a surplus equal to 1.9 percent of spending across all funds in FY13. A decade ago the City's fund equity, a strong indicator of a

community's fiscal health, stood at $11.5 million. While other communities

suffered losses in fund equity over the past decade due to the economy, today the

City's fund equity is $47 million, with FY13's increase of $5.4 million the

highest one-year increase in the City's history.

Standard & Poor's noted the City's budget flexibility achieved

by conservative budgeting and saving practices, which in FY13 yielded reserves

at 17 percent of City spending. The bond rating agency also looked favorably

upon the City's debt levels, citing total government available cash at 30

percent of total expenditures and roughly seven times the City's debt service.

"Moreover,

based on past debt issuance, we believe the city has strong access to capital

markets to provide for liquidity needs," the report states, noting that the

City's overall debt service amounts to 4 percent of spending. "Further

bolstering our view of the city's debt profile is that overall net

debt is a low 1.2% of market value and debt amortization is aggressive."

A Favorable View of

the Somerville Economy

Standard

and Poor's has a favorable view of the Somerville economy, noting in its report

that development has translated to strong growth and additional revenues. Last

year the City realized $3.5 million in new growth--$1 million more than the

previous year-including new growth from new commercial and residential

construction at Assembly Row, along with the completion of Maxwell's Green, new

construction of the Public Storage facility on Middlesex Avenue, renovation of

the Stop & Shop on Route 16 and new personal property growth on Inner Belt

Road. Development in Somerville is guided by SomerVision, the City's 20-year

comprehensive plan developed over two years by the community to codify the

community's values such as housing with a range of affordability, green and

sustainable development, more public green space and walkable streetscapes, and

apply them to each and every development in the city.