|Historic...AAAgain: City again receives highest possible credit ranking from Moody's, S&P
Mayor praises work of city officials, pledges balanced city budget for FY2011
HUNTSVILLE, AL (August 24, 2010)- Huntsville Mayor Tommy Battle delivered historic financial news, for the second year in a row, after The City of Huntsville was assigned credit ratings this week. Standard & Poor's Rating Services assigned the City a rating of "AAA" and Moody's Investor Service assigned a rating of "Aaa", each company reaffirming their prior ratings of the City. These ratings are the highest the City can achieve, and are awarded to a minority of government entities in the nation. In fact, only 462 (roughly 2%) of 17,205 municipal and county government across America received the top rankings.
Mayor Battle said that the single biggest factor in Huntsville again receiving the top rankings is that the city is high-tech, high-education, good-jobs and a great place to live.
"These rankings show that our plan is solid," said Mayor Battle. "Our administration has worked tirelessly to make sure that we have stable finances, satisfactory reserves and manageable debt - but beyond all of that, the day to day management of our departments by City Administrator Rex Reynolds, Interim Director of Urban Planning Marie Bostick, and our department heads is really what separates Huntsville from the rest. We have done more with less across the board, but Rex, Marie and the others are really the ones that hold the line."
The ratings are based on several factors, foremost of which is Huntsville's strong economic base. The City is our region's economic center, has a diverse employment base that is anchored by a strong federal government presence, and is recognized as a leading technology center. Huntsville's economy has remained relatively strong throughout the national recession as evidenced by its tax base, unemployment rates, housing activity and values, and household income. All of these contribute to a more stable tax base and relatively high wealth levels. The ongoing job transfers related to BRAC has enhanced the current climate and the prospects for a stronger economy in 2011 and beyond.
Another important rating factor is the management of City finances by public officials. The recession has stressed the City's financial operations and has required the use of reserve funds, but the City is managing successfully within its conservatively adopted budgets. The level of current reserves is considered satisfactory.
Mayor Battle singled out the efforts of the Huntsville City Council, including Finance Committee Chairman Bill Kling and member Will Culver, Randy Taylor, Director of Finance, Phil Dotts of Public FA and the entire finance department for their direct involvement in the work behind the historically high rankings.
"All of our department heads are holding the line, but Randy Taylor, Phil Dotts and our entire financial team have really gone above and beyond to make sure that Huntsville continues to be highlighted in the best possible light. So much goes into these rankings - but I am confident we wouldn't be in the position we're in without their work," added Mayor Battle.
Finally, the City's overall debt management is well regarded, especially considering the tax base. Our debt levels are modest and are reduced in a relatively short period of time among Huntsville's peers. Mayor Battle added that receiving the historic rankings for a second time presents new challenges for his city.
"The significance of this is not just the historic rankings. With these rankings comes an obligation to our taxpayers. Our commitment to them is that we will continue to cut spending, we will continue to be prudent with our finances and we will continue to present a leaner and more effective government. We are incredibly proud to receive the AAA rankings while emerging from one of the worst economic downturns in our nation's history, but our work will continue."
Credit ratings are considered one of the most comprehensive, external evaluations of a community's financial health. City officials, citizens and the business community can be proud of the diverse contributions they all make to make Huntsville the triple-A city that it is.
Mayor Battle concluded that his commitment to taxpayers will included a balanced and leaner city budget.
"We've said since day one that we will have a leaner government. Our next budget will continue to reflect that."
The City plans to issue debt valued at about $163 million in early September. Of this amount, $65 million will be for City capital projects, $25 million for Huntsville City School projects, and $73 million will refinance existing debt, which will produce savings to taxpayers of several million dollars. Credit ratings assigned to debt help lenders evaluate the financial strength and creditworthiness of a borrower. Higher ratings result in lower interest costs.
Follow the City of Huntsville on Facebook at facebook.com/hsvcity and on Twitter at twitter.com/huntsvillecity