2023 Audit Complete; Rating Agencies Reaffirm AA+; GO Bonds & Notes Sell at Favorable Rates
Today, Mayor Roberto L. Alves announced that the City of Danbury completed its 2023 Audit, was reaffirmed by S&P and Fitch with AA+ ratings, and had a successful sale of its $36,475,000 General Obligation Bonds and $155,250,000 Bond Anticipation Notes.
“These achievements are a direct result of the responsible investments we’ve put into our Finance Department over the past 14 months,” said Mayor Alves. “When I took Office, the 2023 audit was due, but the City hadn’t begun 2022 yet. We were under State watch and since my first MFAC (Municipal Finance Advisory Commission) meeting, I made a commitment to the State and to our taxpayers, that I’d do everything in my power to get us out of this.”
“Our Finance Team had open positions that they weren’t hiring for, and they had not used any of an allocation of $100,000 made by the City Council for audit-related work. And the financial issues didn’t stop at the audit. Early in my term, I discovered that the City taxpayers had been investing in an internal financial software for four years without a definitive plan to bring it online. Through leadership and additional support, we were able to launch last week and deliver internal efficiencies for our staff.”
In early 2024, Mayor Alves hired an additional Assistant Finance Director, filled positions in grants and accounting, and brought on the internal auditing firm CLA to project manage the 2022, 2023, and 2024 audits and the internal software conversion. The City of Danbury filed the 2022 audit last year, and closed on 2023 last week. While a City cannot begin an audit before the previous one is completed, Danbury has started prep work on the 2024 audit, which was due to the State in December of 2024.
Yesterday, the City of Danbury sold $36.5m GO bonds and $155.25m in notes. The notes were sold to JP Morgan with a Net Interest Cost (NIC) of 2.809 and the bonds were sold to Janney Montgomery Scott with a True Interest Cost (TIC) of 3.457 These interest rates were under the City’s goal, and the NIC on our notes is very favorable when compared to other municipal notes sold in CT in the past 12 months.
The City’s notes come due annually, and as such, this sale had been planned for February since last year. Major drivers of the notes include the Danbury Career Academy, the Wastewater Treatment Plant Upgrade, Water Upgrades approved by voters in 2023, and Public Safety and Infrastructure improvement projects approved by voters in 2024. The $36.5m in bonds are primarily driven by completed work at the Danbury Career Academy and the Wastewater Treatment Plant.
Matt Spoerndle, Senior Managing Director at Phoenix Advisors, has been a financial consultant for the City of Danbury since 2000. Here’s what he had to say about the sale:
“The results from today’s sale were not only strong historically for the City, but also from a statewide perspective. It’s clear that both the rating agencies and even more importantly Wall Street investment banks have the utmost confidence in the City, its leadership, and the trajectory the City is on. Congratulations to the City on a truly exceptional result!”