Norwalk Retains Triple-A Bond Rating

NORWALK, Conn. – Months after announcing that Norwalk and other towns and cities were in danger of losing their highly coveted Triple-A bond ratings, Moody’s Investment Services quietly sent an email giving local municipalities the all clear, for now.

The announcement, “Outlook to Stable for Most Aaa-rated Muni Credits Linked to U.S. Government” (see PDF below) was sent out Dec. 7. Darien, Easton, Greenwich, New Canaan, Norwalk, Weston, Westport and Wilton have had their outlook upgraded to stable after being given a negative outlook in August. Fairfield's outlook remained negative because of other reasons than its ties to the federal government. Stamford was not on the list, because it was downgraded last year.

“I am not sure why they even put us on the review list in the first place. But we are pleased that they have decided that we are still Triple-A, and they are staying with our economic outlook,” Norwalk Mayor Richard Moccia said.

Moody’s placed Norwalk and 160 other American Aaa municipalities on a watch list because the federal government was in danger of defaulting on its obligations. The investment service said the municipalities’ ties to the federal government might lead to financial problems.

Moccia and Norwalk's finance director Thomas Hamilton said that was uninformed in Norwalk’s case. “They had earlier suggested that they were going to be focusing on the number of federal employees that are in the workforce in your jurisdiction and your susceptibility to impacts from Medicaid and Medicare,” Hamilton said at the time. “Since we don't get Medicaid and Medicare and because we don't have a significant federal workforce I assumed we were safe.”

Moccia arranged a conference call in August with Moody’s and leaders of 19 local communities. Moody’s representatives listened to their concerns but did not contact the leaders again until the recent email.  

“We never got a good answer from them why they even did it in the first place, and they come out with this grand pronunciation and then very quietly they say, ‘Oh, you’re OK,’” Moccia said.

The process will resume with the annual review, he said, probably next summer. Moody’s representatives tour the city and interview department heads and the mayor to get a sense of how the city is doing. “It can be quite extensive,” Moccia said. “It’s interesting.”

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