City gets financial update
Published 9:39 pm Tuesday, August 8, 2017
Suffolk City Council got good news on the financial front during its July 19 meeting.
City Finance Director Tealen Hansen gave a report on the city’s new and refunded debt and an upgraded credit rating.
The city sold bonds on July 12 and received nine bids, she said.
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“That means that people really want to buy our bonds,” she said.
The city got an interest rate of 2.82 percent, which she said was the second-lowest rate Suffolk had ever received.
“This is a phenomenally good rate for us,” she said.
The three bond rating agencies also had good news for the city. Fitch and S&P affirmed their AAA ratings for the city.
“Moody’s got us one step closer,” Hansen said. “They moved us from a stable outlook to what they call a positive outlook, which means they believe Suffolk is headed in a positive direction.”
Moody’s kept the city’s bond rating at Aa1, one notch below its highest rating.
Hansen noted the rating agencies looked favorably upon the city’s financial policies and leadership.
Bond ratings are judgments of a municipality’s creditworthiness and are used to determine interest rates — higher bond ratings usually mean lower interest rates and a savings for taxpayers.
The city also refinanced $60 million of debt, mostly in the utility fund. That’s estimated to save $7.7 million over the remaining life of the bonds.
Council members were thrilled with the news.
“It’s lower than I would have ever dreamt of being possible in today’s environment,” Councilman Mike Duman said. “It speaks volumes for the financial stability of our city.”
“This is 11 years in the making,” Mayor Linda T. Johnson said. “Hopefully just that one more little step and we’ll have that third AAA. That’s the ultimate goal.”
City Manager Patrick Roberts gave credit to the city’s finance staff, its financial advisers and City Council.
“I’m in an enviable position right now to have very skilled, very knowledgeable, very dedicated finance and budget staff who do this every day,” Roberts said.
Davenport and Co., the city’s financial advisers, “have consistently demonstrated they have the taxpayers’ interests at heart,” Roberts added.