City Bond Ratings Remain Strong
Agency Ratings Signal Sound Financial Management
June 25, 2018
Last week, the City of Tallahassee issued bonds of approximately $27 million to finance a variety of infrastructure projects, including the Weems Road extension and the completion of FAMU Way. These projects are part of the City Commission’s continued focus on infrastructure. Most of the projects being financed are underway or will begin in the next 12 months.
In connection with the Capital Bond issuance, the City received ratings on May 30 from Moody’s Investors Services (Moody’s) and Fitch Ratings Inc. (Fitch) of Aa2 and AA+, respectively. These ratings reflect the City’s strong financial position and sound management.
The City also received separate ratings on its Energy System (electric and gas utilities) and Consolidated Utility Systems (water, sewer, stormwater) bonds. Separate ratings are provided because each “credit” has distinct revenues pledged to pay the debt service. Though each system is rated uniquely, ratings received in the last six months for the Capital Bonds, Energy System and Consolidated Utility Systems are all strong and indicative of a positive financial profile. Liquidity and financial management, including setting appropriate revenue levels, are consistent strengths across the ratings. The Energy System is rated Aa3 and AA by Moody’s and Standard & Poor’s Financial Services LLC (Standard and Poor’s), respectively, while the Consolidated Utility Systems is rated AA+ and AA by Fitch and Standard & Poor’s.
“These bond ratings solidify what we have come to expect in Tallahassee – sound financial management and a strong economic outlook,” said Mayor Andrew Gillum.
As was mentioned at the most recent City Commission budget workshop, the strong financial position of the City includes a deficiencies fund, which is funded at or above policy level. Deficiencies fund balances were drawn down to meet budgetary needs during the financial crises but have since been restored at the direction of the City Commission.
“The continued strong rating of our bond programs is the result of sound decisions by the City Commission and effective operations by City staff,” City Treasurer-Clerk Jim Cooke said. “We are committed to implementing financially responsible management practices; that commitment is being recognized and noted by our nation’s most respected credit rating agencies.”
For more information, please contact the City Treasurer-Clerk’s Office at 891-8130.
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