City’s bond rating shows improvement



With so much negative economic news and concern for our economy, I thought some good news would be in order.

In January, the City of Huntsville was informed that its underlying bond rating by Standard and Poor has been upgraded to A+ for both general obligation and revenue debt issues.

Standard and Poor’s rating for the city’s water and sewer was one of only 18 in the state, jumping two ratings steps from A- to A+.

Rating Huntsville for the first time, Fitch has rated Huntsville AA-, a step higher than Standard and Poor’s. These are important in recognizing the financial stability and management of the city.

The residents of Huntsville have been clear that the financial management of the city is a top priority.

City Councils have responded with policies and budget planning that reflect the residents’ concerns. Ultimately, the financial management of the city falls on all our dedicated employees at the city.

Bond ratings are important to cities in managing and planning for debt management. Borrowing and issuing bonds are tools available to finance major projects, other important improvements, and needs of the city.

The higher the rating, the better position cities are in when establishing interest rates on issuing new debt or refinancing existing debt.

Interest rates on debt, whether based on revenues or tax base, are sensitive to the rating of the city’s bonds. Simply put the better bond rating, the better interest rate, and consequently the best use of the public’s funds.

This is not to imply that the City of Huntsville is considering a major bond issue.

A better bond rating confirms the quality and level of financial management of the city. Ratings are established by taking into account a number of factors. First, budgeting, financial planning and implementation throughout the year are vital to the management of the city. Secondly, reserves, cash management, investment management, and capital planning are significant indicators of the city’s sound financial position.

Also, reserves and cash are viewed as to how well the city is prepared to address unforeseen needs or situations and forecasts the city’s ability to fund its operations and fulfill its obligations. Lastly, the city’s reporting of financial information and policies are evaluated. This is important so that citizens are aware of the city’s financial stability and that funds are being spent wisely and prudently. In all these areas the city has made significant progress.

I take this opportunity to commend my fellow council members, present and past, the city managers, charter officers, finance director and finance department, department heads, and all city employees for their hard work and dedication in this accomplishment.

I want to thank the residents of Huntsville for their input, concern and support.

Improving the city’s bond rating did not happen overnight and was a team effort of which we can all be proud. The challenge now is to continue that effort and improve on the city’s commitment to sound financial management. I have no doubt we can do just that.



Mac Woodward

Huntsville



The views and opinions expressed in this letter are only mine. They do not reflect or represent the views and opinions of anyone else.