Moody's Still to Review Wayland's Credit Rating?

Late last week, Moody’s Investors Service announced it had placed Wayland and several other Massachusetts towns under review for possible , in light of the federal debt ceiling wrangling.

The agreement was reached in Washington; was approved by both U.S. House and Senate and, just hours ago, Pres. Barack Obama signed the bill, ending the debt ceiling battle and averting possible default on U.S. debt.

So will this stave off the national credit downgrade and review of local ratings?

"We will be studying what the president signed and will weigh our options on both the U.S. sovereign and the municipalities on review accordingly," said Moody's communications strategist David Jacobson in an email to Patch.

There has been question about why specific cities and towns such as Wayland were picked for early review.

Town Administrator Fred Turkington told Wayland Patch that the “focus of Moody’s review makes good sense,” but he admitted the reasons for placing local governments on the review list

But Brookline  Director Stephen Cirillo explained that, as the nation's bond rating faced a possible downgrade, Moody's had to ask the question whether a state or town government could have a rating higher than that of its sovereign nation. Cirillo said that it is possible, but before Moody's would allow it, the agency must review the credit ratings, beginning with the Aaa-rated communities. In Massachusetts, this includes, among others, Acton, Brookline, Newton, Wayland and Weston, and the Lincoln-Sudbury school district.

"The ratings of these local governments, particularly those with a high economic dependence on federal activity, would be vulnerable to a downgrade of the U.S. government," Moody's Senior Vice President Matt Jones, a team leader covering local government ratings, said in a press release from Moody's.

If the national credit rating remains the same in light of today's sealed deal, Moody's will review and determine what the next steps are -- it must first review what's in the debt ceiling deal. The agency has not yet changed the ratings for the nation or Wayland, or for any other town in Massachusetts. 

Should the review go forward, Turkington said the criteria Moody’s outlined for the review left him confident that Wayland could maintain its Aaa rating “given our strong tax collection rate and record of financial management, solid reserves and low dependence on state or federal aid.”

He added that the result of a credit downgrade for Wayland's would "result in a slight increase in borrowing costs for future debt."

Weston Finance Director Sarah Johnson told Weston Patch that the effect on residents would be minimal if Weston's credit rating was lowered.

“The affect on town finances? There would probably be a slight increase in interest,” she said.

Meanwhile, Newton Mayor Setti Warren was “deeply concerned” about the impact the United State’s credit rating will have on the city of Newton. 

“If this is not resolved, it could result in very serious measures in Newton and across the state." Warren told Newton Patch on Friday, adding that without the Aaa rating, the city may not have the capacity to complete or initiate some infrastructure projects.