Suffolk’s credit rating improves

Published 11:24 pm Wednesday, October 15, 2008

All three of the national credit rating agencies have enhanced the city of Suffolk’s credit ratings from where they were this time two years ago.

The city’s credit rating is an assessment of its creditworthiness, and it works much like a person’s credit score.

Each of the three private independent rating agencies – Standard & Poor’s, Moody’s and Fitch – gave the city higher scores on their respective scales.

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Standard and Poor’s upgraded the city’s rating to “AA” from an “A+.” The highest rating Standard and Poor’s gives is “AAA.”

Moody’s kept the city’s “Aa3” rating, but removed the “negative” outlook that was attached.

Fitch kept the city’s “AA-” rating, but raised the bar by naming the city’s outlook “positive.”

According to Standard and Poor’s commentary on its results, the city earned the upgrade “based on Suffolk’s growing economy, which continues to diversify, prudent financial management dedicated to maintaining strong financial performance goals, as evidenced by reaching its reserve target, among other comprehensive financial policies.”

Fitch’s results commentary said more of the same, attributing the city’s rating to “Suffolk’s improved financial practices, which have begun to address its previous non-compliance with its financial policies.”

The commentary from Moody’s rating praised the city’s management team, saying it has “exerted more effective financial control and adopted more prudent capital planning and borrowing procedures.”

David Rose of Davenport & Company, the city’s financial advisor, delivered the good news during a City Council work session to Wednesday. He credited council’s hard work and tough decisions.

Also during the work session, Anne Seward, Suffolk’s budget officer, and Treasurer Ron Williams delivered a fuller picture of the city’s financial outlook.

Presenting figures showing cash balances for the past seven years, Williams said the city has more than five times the cash balance than it did just two years ago.

Seward said she and her team were happy with the city’s current financial position, adding that 2008 appears to be a strong fiscal year so far.

“We are seeing revenue growth is there,” she said. “It’s slowing, but we are still in revenue growth mode.”

As for the credit rating increase, members of council shared their support and excitement for the new ratings.

At the council’s regular session meeting, Councilman Jeff Gardy said it showed the governing body’s ability to disagree, but to still get work done and “boil it all down in the right direction.”

Councilman Charles Parr said he was pleased with the city’s progress.

“When I came on council, I campaigned to get our finances in order,” he said. “I think this council has done a good job on that.”

Finally, Mayor Linda T. Johnson said she was “extremely proud” of the city’s financial situation.

“The fact that we are solid and whole today is a good thing.”