A pat on the back is in order for the town’s financial managers and volunteer committee members who can rightly take credit for Standard & Poor’s recent decision to upgrade Harvard’s bond rating from AA+ to AAA.
The new assessment is a signal to investors that any long-term bonds Harvard issues in the near future are among the strongest on the market, helping to lower their rate of interest and attracting the most conservative buyers.
While S&P ratings are—in its words—just “opinions” about the ability of a town to meet its obligations to borrowers, they can also be seen as a financial report card, an assessment of Harvard’s success in managing its money and planning for future expenses. In analyzing a town’s credit worthiness, S&P takes into account a number of traditional financial indicators, such as the town’s ability to maintain a balanced budget and the size of its reserve funds, and some measures depend on the state of the Massachusetts economy and government. But as much as 30 percent of an S&P evaluation rests on judgments about the strength of a town’s institutional framework and management. Both were rated strong in the May report, which praised Harvard for having “a management team with good policies and procedures” and “a record of financial stability.”
This assessment is a compliment to everyone who has labored over the years to keep Harvard’s financial house in order, from the Finance and Capital Planning and Investment committees to the Board of Selectmen and Town Hall administration. It’s not always pretty, but the results speak for themselves.
