Financial outlook 'positive'

Staff

Published Wednesday, June 30, 2004

Suffolk News-Herald

The city's fiscal report card is slightly improved, thanks to a revised outlook given by the rating agency, Standard & Poor's.

Earlier this month, city officials met with the rating agencies of Standard & Poor's, Fitch Ratings, and Moody's Investors Service to obtain bond ratings on approximately $18.5 million general obligation bond issues scheduled for sale next month. Bond proceeds will fund various capital improvements projects in the city, including the final phase of funding for the new King's Fork High School.

Although Standard & Poor's kept its rating at "AA-", the agency on Tuesday notified the city that it had modified its standing from "stable" to "positive."

In the long run, this could allow the city to borrow more money for much less in interest.

"While this is not an upgrade in our rating, it is an incremental step in the process," said Dennis Craff, spokesman for the city. "It gets us closer to an upgrade."

Standard & Poor's revised outlook "is based on the city's sustained strong financial position and rapidly growing tax base and economy."

The agency also noted that "the city has been able to sustain its strong financial position through its rapid tax base growth and tight financial oversight."

Both Moody's and Fitch held the City in good financial standing, retaining their "Aa2" and "AA" ratings respectively.

JoAnne Carter, managing director at Public Financial Management, the city's financial advisor, said the city's continued favorable ratings from all three rating agencies - particularly Standard & Poor's change from stable to positive for its outlook - reflect "sound financial management practices, strong financial conditions and continued economic development initiatives taking place throughout the city."

S&P's change in outlook is based on the company's expectation that existing positive trends within the city will continue, Carter added.

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