NEWPORT — Two bond-rating upgrades from Moody's Investors Service has city officials excited about the chance to save money.

        An A2 rating given for the city's $13.765 million bond issue by Moody's will mean lower interest rates than in the past. The A2 rating means the city is a safer credit risk than the Baa1 rating it had when it built the new city building.

        “We're looking in the neighborhood of $20,000 to $30,000 saved per year,” said Newport Chief Financial Officer Greg Engleman. “It saves the city of Newport probably a quarter-million dollars over the life of the bonds and that's real money.”

        Thomas O'Donnell, an analyst with Moody's, worked with the city on the rating.

        He said it is tough to compare the A2 rating and the Baa1 rating because of legal differences. He said the Baa1 rating for the city building has also been changed to A3.

        “There is a legal difference in the security for the different bonds, and thus, different ratings,” said Mr. O'Donnell.

        “The primary differences are that on the A3, the city has the legal ability to decide not to repay the debt, and that this debt is payable from the General Fund, which does not have an unlimited property tax ability.

        “The new A2 bonds are legally secured by an unlimited property tax specifically for the debt service, and they have to repay the bonds or investors can sue.”

        The A2 public improvement bond will be used for infrastructure projects like the Monmouth Street streetscape program, a citywide street program, part of the recreation master plan and the public services facility.

        Mr. O'Donnell's report recognized the city's healthy budget, economic development, tax-base growth, manageable debt level and solid planning as reasons for receiving the rating.

        Mr. Engleman said the city's five-year budget plan also impressed Moody's.

        “It says a lot about the city's vision and strides in development,” said City Manager Phil Ciafardini. “It's something we're very proud of.”

        Mr. Engleman said the city would possibly pursue such a rating on future bond matters but it will depend on variables.

        “It depends on how much money you're borrowing,” he said. “There are other ways to go when borrowing.

        “We just determined in this particular case, because of the size of the bond and because of the interest-rate climate that exists right now and because of the successes of the city, it was an optimum time to pursue this.”

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