CHARLOTTESVILLE, VIRGINIA - The City of Charlottesville announced today that during the Bond sale process Charlottesville again received the highest rating from both Standard & Poor's Rating Services and Moody's Investor Services. Standard & Poor's issued its highest rating of "AAA" and Moody's also issued its highest rating of "Aaa". Moody's and Standard & Poor's Bond Ratings reflect an unbiased assessment of the credit worthiness of debt obligation in the public financial market. The higher the rating, the stronger the borrowing power and the lower the interest rates available to municipalities.
Four key factors are used by Moody's and Standard & Poor's to rate the cities debt issues. The Economy is a factor which includes demographics, employment base, property values and taxpayer composition. Another major factor is Management which includes policies and procedures, strategic planning, ability to achieve budget targets and management experience and continuity. The third major factor is Financial which includes budget practices, investments and fund balances. The final major factor is Debt which includes debt ratios such as debt per capita, debt to real estate values, capital needs planning and legal debt limits.
"The ability to maintain 'AAA/Aaa' General Obligation Bond ratings in today's difficult economic times is a testament to the leadership of the City Council and staff. As a result, the City's taxpayers will benefit by achieving a borrowing cost .25% lower than its 'AA/Aa' rated peers or estimated debt service savings of more than $400,000 on the upcoming bond issue." said Kevin Rotty a Managing Director with Public Financial Management, the City's Financial Advisor.
The rating agencies in the most recent review noted the following in their reports on Charlottesville's rating:
- Conservative budgeting and fiscal management policies
- Consistently strong financial performance
- Low debt burden
- Strong management practices
"We are fortunate to be one of just five localities, and the only city, in the state of Virginia to receive AAA/Aaa-stable ratings from Standard & Poor's and Moody's," said City Manager Maurice Jones. "Our city has managed to remain in a strong financial position despite the sluggish national economy. We believe that positions us well for the future as the economy improves."
Moody's has rated Charlottesville Aaa since 1973 and Standard & Poor's has rated AAA since 1964.