Watertown this month was awarded the highest bond rating offered by Standard & Poor's -- AAA -- an upgrade from the town's previous AA+ rating, local officials said.
This is the first time Watertown has received the AAA rating, said town manager Michael Driscoll.
The rank indicates the reliability of investing in Watertown's municipal bonds, and will help the town save as it borrows money to fund projects.
"In essence, the higher the bond rating the lower the interest cost is when a city or town goes to borrow," Driscoll said.
The new AAA rating has already saved the town $77,425 on the Nov. 7 sale of a $6 million bond this month, Driscoll said.
The upgraded rating was awarded after analysts scrutinized Watertown's economy, budget, liquidity, and management, deeming all as superior, according to a report issued by Standard & Poor's.
Analysts specifically cited the town's ability to increase its reserves from $11 million in 2010 to $17 million in 2012, and noted that Watertown ended with a 4 percent budget surplus last year and officials intend to see another surplus this year.
"We do not expect to change the rating within our two-year outlook horizon due to our expectation that the town will maintain strong budgetary performance despite of increasing pension contributions," analysts wrote in the report.
Currently, there are 25 Massachusetts cities and towns and two school districts rated AAA by Standard & Poor's. Other nearby AAA communities include Cambridge, Wellesley, Natick and Needham, according to documents provided to Watertown officials.
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