City of Charlottesville Receives AAA Bond Rating
CHARLOTTESVILLE, VA -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.
During a recent presentation to City Council, PFM, the City's Financial Advisor, provided information that the rate differential between a Aaa rated locality and an Aa rated locality has saved the City $1,888,075 dollars over the life of $100 million in bonded debt and $5,802,75 dollars when compared to an A rated locality. The City currently has $120 million dollars in outstanding debt.
The rating agencies in the most recent review noted the following in their reports on Charlottesville's rating:
"We are proud to be the only city, and just one of five localities in the state of Virginia to receive AAA/Aaa-stable ratings from Standard & Poor's and Moody's," said City Manager Maurice Jones. "The AAA/Aaa ratings allow the City to borrow money at a lower interest rate which in turn saves taxpayers money on much needed capital improvements."
Moody's has rated Charlottesville Aaa since 1973 and Standard & Poor's has rated AAA since 1964.