FREEPORT – Freeport officials are crowing about the AAA rating conferred on the town last week by the credit rating service Standard & Poor’s.
Town Manager Peter Joseph said that Freeport joins Kennebunk, Cape Elizabeth, South Portland, Raymond, Falmouth and Bar Harbor on the list of AAA-rated communities.
“It’s a great thing for us,” Joseph said. “It means our bonds are worth more to investors. We’re at the least risk of not repaying our debt.”
Abbe Yacoben, the town finance director, said that Standard & Poor’s conducts the ratings every two or three years. Freeport went from AA to AA-plus in 2011, she said.
Joseph said that Standard & Poor’s bases its ratings on internal audits, looking for controls and practices. Those are predictors of the ability to pay debt, he said.
Freeport has a debt level of $5 million.
The AAA rating tells him that town government is doing its job, Joseph said.
“That’s something that I think is a pretty big deal for us, and that our finance director stays on top of things, which I continue to be impressed with.”
Yacoben is one of only three people in Maine to be designated a Certified Public Finance Officer. Yacoben said the town earned its upgrade though Standard and Poor’s Rating Agency’s recalibration/rerating process.
”This means that if the town should enter the debt market in a competitive sale, there would most likely be interest rate savings and the number of bidders is likely to be larger as some investors prefer AAA-rated debt,” Yacoben said. “The town is very proud that among the items cited were budgetary flexibility, strong liquidity, and good financial management practices.
“The Town Council should be proud of implementing solid strong fiscal policies. For me, it means the policies the council sets are solid,” she said.
Some 30 years ago, teetering toward bankruptcy, Freeport was facing the threat of a state-ordered shutdown of its government, and Standard & Poor’s had taken away the town’s bond rating. With the efforts of the newly hired town manager, Dale Olmstead, and others, the town pulled itself out of the financial morass.
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