|HUNTSVILLE SECURES AAA RATINGS - AGAIN - FROM MOODY'S AND STANDARD & POOR'S
(HUNTSVILLE, AL)-For the third year in a row, Huntsville Mayor Tommy Battle received historic financial news from two of the nation's top credit rating agencies. Standard & Poor's Rating Services and Moody's Investors Service assigned The City of Huntsville their highest credit ratings.
S & P awarded Huntsville a rating of "AAA" and Moody's Investors Service awarded a rating of "Aaa," each company reaffirming their prior ratings for the years since Mayor Battle has been in office.
The triple-A ratings are the highest a city can achieve, and are awarded to a minority of government entities in the nation. Less than two percent of 17,205 municipal and county governments across America receive the top rankings.
"I am most proud of our City to receive this distinction for three years running," said Mayor Battle. "This is no accident. We have worked hard to keep our City government fiscally responsible in a severe economic downturn and still provide the quality level of services our citizens deserve."
S & P cited Huntsville's strong financial management practices, strong budgeting and long-term capital planning in its rationale for the AAA rating. Further, its rating reflected the City's growing economy that, "despite the recession, has continued to expand and is poised for additional growth." The report also acknowledged Huntsville's "extremely strong wealth" in terms of income, diversifying property tax base, military, aerospace and electronic industries and moderate overall debt.
In the Moody's report, Huntsville's strengths included its tax base, significant government presence, stable finances, above average wealth, and below average employment. The City's unemployment rate is 8.1 percent, the lowest in the state, and one of the lowest in the country.
Moody's did issue their top rating to Huntsville with a caveat, a "negative outlook due to the City's indirect linkages to the weakened credit profile of the U.S. government."
The Mayor applauded the efforts of his administrative chief Rex Reynolds, the Huntsville City Council, Finance Director Randy Taylor, and all of the city departments for their direct involvement in the work behind the historically high rankings.
"We do pat ourselves on the back, but this is as much a commentary on the nature of Huntsville with its strong tax base as it is on City government," said Finance Director Randy Taylor. "We can incentivize only so much, and at the end of the day, a lot of smart people have spent millions and billions of their own dollars to make Huntsville what it is. The City gets credit for managing the resources, and we nurture our economy with broad base development efforts, which includes spending tax-payer money wisely and not over borrowing. But at heart of that, a city must have a strong tax base, and it is impressive that Huntsville has managed economically persevere through a deep recession."
Taylor says the City plans to issue debt valued at about $105 million in early November. Of this amount, about $30 million will go toward capital projects, $55 million for Huntsville school system improvements, and $20 million for sewer upgrades. If interest rates remain low, the City may also refinance up to $25 million in older, higher-interest debt, saving taxpayers more money.
Credit ratings assigned to debt help lenders evaluate the financial strength and creditworthiness of a borrower. Higher ratings result in lower interest costs.
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