By MARK SARDELLA
WAKEFIELD – Due mainly to debt incurred because of new school construction, the town’s bond rating has been downgraded from the highest possible AAA rating to the second-best AA+. The AA+ rating still signifies very low credit risk and indicates that the town has a strong capacity to repay its debts.
The news came at last night’s Town Council meeting as part of a financial update provided by interim Town Administrator Kevin Gill. Gill reported on the town’s bonds as well as what the recently approved state budget is expected to mean for Wakefield.
Gill, who for many years served as Town Accountant, said that town officials had a surveillance call in mid-June with bond rating agency Standard & Poors (S&P), which resulted in the rating downgrade.
Gill reviewed some of the town’s current short and long-term bonds, which include $106,144,000 for the new high school as well as smaller amounts for things like water mains, roadway improvements and other projects approved by Town Meeting.
Town Councilor Douglas Butler, a former Finance Committee member, stressed that going from a AAA rating to AA+ will not have a huge impact on the rates that the town pays on its borrowing. He estimated that the downgrade will likely cost the town about $50,000 to $110,000 a year in additional interest on the town’s current outstanding bonds.
He said that the rating downgrade was due to the town taking on a huge amount of debt to build the new high school, but he stressed that the highest bond rating (AAA) and the second highest (AA+) are “pretty darn close.”
“This is not a huge increase in our risk profile,” Butler said.
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Gill also provided an update on the FY2026 state budget that was passed a couple of weeks ago and discussed what it means for the town.
He said that, according to the “Cherry Sheet,” which provides cities and towns with preliminary estimates of state aid, the town can expect to get $14,430,007 in state aid this year, which is $592,000 (4.3 percent) more than was received in FY2025. Gill stressed that the lion’s share of that amount is the approximately $9 million that the town will get in Chapter 70 school funding.
He also noted that the reported amount does not include several earmarks from the state, including $75,000 for HVAC upgrades at the John J. McCarthy Senior Center, $50,000 for improvements at Mapleway Playground in Greenwood, $25,000 for a “pollinator garden” and $20,000 for ADA improvements at the Albion Cultural Exchange.
Gill did insert a note of caution related to the possibility of so-called “9C cuts” later in the year if the state does not receive the expected level of federal funding.