The City's recent bond rating review was triggered by our need to

borrow for the new police station.

While the revised bond rating is AA-, it still leaves Ansonia in the high
performing "AA" category. Ansonia is now rated higher than its
municipal neighbors Derby and Shelton, which just recently were
downgraded below the AA category. Anything in the double A category
is solid rating.

The fund balance was purposely reduced in order to put taxpayer funds
back in the hands of taxpayers and not just to stockpile the funds.
Funds were used to pay for one-time expenses, badly needed
infrastructure upgrades and to bolster city services. Some unexpected
expenses further reduced the fund balance.

The real good news here is that Ansonia's cost of borrowing was not
impacted. Much to the contrary, the results of the bond sale that
necessitated the review were spectacular. The City’s recent sale of 20
year bonds received an interest cost of 2.11%, a historic low, and was
actually lower than recent bond sale rates received by much wealthier
towns like Norwalk, Stamford and Darien. Ansonia borrowed $5 million
for the police station project and secured a 2.11% rate over 20 years.
Please see the attached comparison charts. Ansonia outperformed
every other community. This is a clear victory for taxpayers and the
entire community.

With respect to S&P's analysis, it is important to note that the priorities

of the community are not always identical to the priorities of the rating
agency. Would residents prefer a relatively higher fund balance in
exchange for higher taxes, or lower spending on education? Ansonia's
financial strategy was tailored to meet the needs of our community first
and foremost. This has allowed Ansonia to stabilize taxes, increase
funding for city services, and still maintain a very solid bond rating. The
Mayor and his administration stand behind this strategy and its results.

That said, the City has set a goal of maintaining undesignated fund
balance at 8-10% of the total budget. This is where we are now at about
9%. As explained during the budget season, reliance on the
undesignated fund balance has been greatly reduced going forward,
which is completely in-line with the S&P comments. The plan has
always been to return the reserves to a reasonable level without
undue accumulation of tax dollars or overtaxing.

Finally, there is no better measure of the condition of the City then what
the market place charges Ansonia to finance its capital projects. So by
that measure, we are doing very well.