S&P Global has upheld the City of Milford’s AA-minus credit rating but assigned a negative outlook, Milford finance staff told the Finance & Audit Committee at its Aug. 11 meeting.

Lou Vitola, senior accountant, said S&P carried out a detailed review, convening committee deliberations and follow-up calls with city staff, and concluded that despite a temporary negative governmental net position on the 2024 financial statements, Milford’s financial management and city management are strong enough to sustain the AA-minus rating.

Why it matters: credit ratings affect the city’s borrowing costs and investor perception. The committee focused on why the 2024 governmental fund financials showed a negative net position and how that accounting outcome affected S&P’s review.

Vitola explained the accounting detail: the city used an interfund loan to replace part of a construction-period note from PNC used to build the police station. Under Governmental Accounting Standards Board (GASB) rules, an interfund loan may be reported as a current liability on governmental fund financial statements even when the underlying financing is long term. Vitola said that accounting treatment produced a roughly $3.5 million swing in the governmental fund net position and that S&P “couldn’t get that out of their front field of vision” during the review.

Vitola said S&P recognized the context — that the city used the interfund structure to reduce interest costs and that proceeds and maturity structures are strong — and that, after extensive review, S&P upheld the AA‑minus rating but placed it on a negative outlook. Vitola added the negative net position is expected to be resolved early in fiscal 2026 when related transactions mature and the city’s reported net position will improve.

Vitola described S&P’s reaction as surprisingly positive given the accounting presentation: the ratings team “went to committee 5 times to deliberate” and ultimately commended the city’s financial management.

What happens next: staff said the negative outlook is a low bar for further action but warrants monitoring; Vitola and other staff will continue to respond to rating‑agency requests and expect the governmental net position to return to positive in fiscal 2026 as financing is resolved.

Selected quote:
"It was just an overwhelmingly positive experience," Vitola said of S&P’s interactions with city staff and the outcome of the review.

Ending: The committee received the S&P update as part of its packet; no formal committee vote or action was taken on the rating itself at the Aug. 11 meeting.