CITY RECEIVES LOW BORROWING RATE AFTER HIGH CREDIT RATING

Moody's
assigned an Aa2 rating to the $13.94 million general obligation loan the City
bonded to permanently finance short-term borrowing, originally issued for
various capital projects including the newly reopened East Somerville Community
School, additional school remodeling and construction of the Founders Ice Rink.
Because of the very favorable credit rating assigned to that loan, the City
received a low 3.29 percent interest rate over 20 years.

In
assigning the credit rating, Moody's cited the City of Somerville's
conservative budgetary practices, strong reserve levels, ongoing "healthy"
redevelopment, above average overall debt burden and the City's financial
position remaining stable despite historical state aid declines. Moody's also maintained
the City's Aa2 long-term rating on its outstanding general obligation debt, the
highest ever long-term credit rating in the City's history.

"It
is costing taxpayers less to fund projects that are propelling the City of
Somerville forward due to our great long-term credit rating, and the credit
rating on this borrowing and subsequent low interest rate is an example of
that," City Finance Director Edward Bean said. "Moody's says our financial
position will remain stable in the near term because of the City's conservative
budget approach and ample reserve levels, noting that we balanced the budget
despite another reduction in state aid of $2.4 million. We continue to offer
far more services than most cities and continue to invest in projects while spending
nearly the least per capita in Massachusetts. It shows we're maximizing every
tax dollar."

Moody's
report positively notes that the City of Somerville has "embarked on an
ambitious economic development plan," pointing to Assembly Square and Union Square
specifically. It also notes the positive impact of the forthcoming Green Line
Extension, the City's new partnership agreement with Tufts University through
which Tufts pays the City $275,000 a year, that income levels in the city have
improved over the past 13 years, and that unemployment rates trend comfortably
below state and national averages.

"The
financial markets see Somerville's growth, our prudent, thoughtful planning and
budgeting, and taxpayers are being rewarded through favorable rates. It's
costing us less to do more," said Mayor Joseph A. Curtatone. "Smart, targeted
investments are unlocking the City's economic opportunities, broadening our tax
base and increasing the quality of life for residents, while remaining at manageable
debt levels. This administration's fiscal policy and the stewardship of our
Board of Aldermen has put Somerville on this upward trajectory, and Moody's
recognizes that and is telling the financial markets that Somerville is a great
investment."