WINCHESTER — When Mayor Candy Perez got the news that the town had received an A1 rating from Moody’s Investor Services, she was thrilled.
The A1 rating reflects the town’s limited, but stable, tax base with average income and wealth metrics, improved financial position, and manageable long-term liabilities, according to the Moody’s announcement.
For Perez, the rating is a confirmation of the town’s hard work to right itself, financially, after its former finance director, Henry Centrella, defrauded the town and embezzled more than $2 million from town coffers over a five-year period. He was sentenced in 2014 to 11 years in prison and five years’ probation for his crimes.
According to a Register Citizen story published in April 2014, investigators, including the Western District Major Crime Squad and town-hired auditors, found that Centrella, a Winsted native who had complete control over the town’s finances, kept cash collected for tax payments and used money from other town accounts to cover those missing funds. In 2010, for example, more than $544,000 was found to be missing from town accounts. Detectives also reported that Centrella would remove cash from town accounts for his personal use and filed fraudulent tax documents, claiming he was withholding more than he actually was, to receive a larger tax return. Police say he used the money he stole to support a gambling habit and to purchase gifts for a mistress in Florida. According to prosecutors, 808 instances of theft were discovered, with State’s Attorney David Shepack allegeding the thefts likely went back even further because Centrella had access to the town’s tax department starting in 2001.
The fallout from Centrella’s actions left the town’s leaders as well as its taxpayers in a difficult situation, and one that everyone has worked to overcome, Perez said.
“It’s just another confirmation that over the past five years, that our new town management and our new financial staff, have worked so hard to make sure we have everything in place financially, and(it shows) that the community has worked hard as well, to restore us to this position,” she said. “This wasn’t done by any one board, or any one person, everyone in the community had a part to get us to this rating.”
Town Finance Director Bruce Stratford also was happy with the news.
“We are pleased the restoration of a firm financial structure for the town has been recognized by Moody’s Investors Service with the A1 issuer rating, which indicates a low credit risk for investors in the Town’s bonds,” he said in a statement.
This is the first time Moody’s has rated the town since July 2013. The A1 rating was last assigned to the town in November 2010.
Because of delayed audits, the rating was reduced to A2 in June 2013. In July 2013, Moody’s further reduced the rating to A3 and then withdrew the rating when Winchester reported a further delay in the fiscal year 2012 audit. The investigation into Centrella’s activities, and the resulting loss of more than $2 million, affected everyone in Winsted, Perez said.
“The community as a whole was affected by that individual (Centrella), and the boards, commissions and departments in town had to deal with the effects of what he had done,” she said. “The community had to pay for it. We got the money back, but we still had to build up a reserve and the community knew what had to be done. People paid their taxes.”
Careful spending was another reason the town was able to recover itself financially, she said. “We were able to be prudent in our spending. ... We were fortunately to have gotten some state funding for projects like the Holabird bridge, for example. Everyone contributed to this recovery.”
The mayor also credited “people pulling for Winsted” for helping improve the town’s financial standing and its reputation.
“Even people outside the town, they were pulling for us to recover,” she said. “Every step we take now, our whole reputation is enhanced. Developers are taking notice. Investors are putting money into our infrastructure .. the American Mural Project, Charlotte Hungerford Hospital, they’re all investing in our town. And then there are all the people who have worked hard in Winsted for a long time: Whiting Mills, Mario’s, Monacos; the people in the industrial park, all who are providing employment, making the town a destination. They get up every day and work hard to make Winsted better.
“That’s the significance of an A1 bond rating,” Perez said. “The Hinsdale School renovation project passed on Saturday, and we’ll be able to borrow (funding for that project) at a better rate. We still have to wait for confirmation from the state on the rating, but we have a strong state representative (Jay Case) and we believe he’ll do what he can to help us.”
Perez also believes that as Winchester grows stronger financially, more people will invest in it. “People are seeing that the town is supporting itself,” she said. “People are saying, ‘I think I will too.’”