Moody’s has reaffirmed the city’s strong Aa2 bond rating, as part of its review of the recent $2.7 million refinancing of debt in tax incremental districts 1 and 2.
From the Moody’s press release …
The Aa2 rating reflects the city’s mature, landlocked tax base near the City of Milwaukee (A1 stable); healthy financial position; above average debt burden with rapid principal amortization; and moderate pension liabilities.
So, generally really good news, with some watchouts around risk factors like “deterioration in the city’s tax base and/or demographic profile, material declines in available reserves and liquidity and increases to the debt or pension burden” — common items for communities like ours from ratings agencies.
For more context, I asked Jeff Belongia, our longtime bond counsel from Hutchinson, Shockey, Erley & Co., for his thoughts at Tuesday’s council meeting.
He said we are a solid Aa2, two steps away from a top AAA rating, and cited our strong financial management practices, more-than-adequate cash reserves, and our “proactive” approach to revitalization of the city, especially the former Bucyrus campus, of which rating agencies have taken notice.
“You are in a really good position,” he said. “The city is doing a good job.”
From our city administrator, clerk and treasurer, to our common council, I thank all of the city staff and elected officials who have gotten us to this point, and I look forward to building on this strong financial foundation.