Great Barrington — A joint meeting of the Selectboard and Finance Committee on Tuesday, February 3, revealed that S&P Global Ratings, formally known as Standard & Poor’s, downgraded the town’s credit rating back in October.
For nine years prior to October, the town maintained an AAA bond rating.
An AAA rating is the highest rating assigned by S&P, meaning “the obligor’s capacity to meet its financial commitment on the obligation is extremely strong.”
According to a press release from S&P that was issued back on October 15, the town’s rating was lowered to AA+, the second highest rating assigned by S&P, meaning the town has a “[v]ery strong capacity to meet financial commitments, with a slight difference from the highest rating.”
S&P stated in the press release that while the town’s financial outlook is stable, “The downgrade reflects Great Barrington’s weakened economic metrics relative to the nation, as well as an anticipated decrease in the town’s reserve position and exhaustion of its unused levy capacity, which we believe will increase operating pressure.”
S&P continues:
We view the town’s environmental, social, and governance factors as neutral in our analysis.
The stable outlook reflects our expectation that Great Barrington will likely produce roughly breakeven operating results over the outlook period and its reserve position will remain comparable with those of peers following the anticipated decrease.
We could lower the rating if the town’s finance performance deteriorates and management is unable to maintain breakeven operations, resulting in operating deficits and diminished reserves without a plan to sustainably align recurring revenues and expenditures.
While not anticipated, we could raise the rating if Great Barrington’s economic metrics improve to levels comparable with those of higher-rated peers or if it returns to generating surplus operations while maintaining material unused levy capacity.
At the Selectboard and Finance Committee’s joint meeting on February 3, Town Manager Liz Hartsgrove gave a presentation on the current state of the town’s finances and gave a forecast of the fiscal 2027 budget.
Regarding the lowered rating, Hartsgrove said, “Once you drop down, it’s going to take us years to get back up.”
According to S&P’s website, Lenox continues to have an AAA rating, which it has had since 2017. Lenox is now the only Berkshire County municipality with an AAA rating.
