City Bond Rating Is A-Ok
For the first time in more than 30 years, the city of Jamestown has a bond rating in the A classification.
On Monday, Jamestown Mayor Sam Teresi shared the positive news with City Council about the upgrade in the bond rating. This is the second time in three years the city has seen an increase. In June 2010, the bond rating went up to Baa1, which is considered lower-medium quality. Last month, the rating went up again to an A-minus, which is considered an upper-medium quality.
Teresi said the new bond rating will mean a better credit rating when looking to bond costly infrastructure projects or equipment purchases.
”This lowers any interest rates which means we save taxpayer money,” he said.
The improved rating also means the city is a better credit risk to lenders, which will increase the number of parties interested in lending financial support. With more parties involved this will mean competition, which will lead to better rates.
”We are an ‘A’ community again,” Teresi said.
Several factors went into the city’s rating. The positives included an available fund balance, low debt obligations, strong cash liquidity and a recent track record of quality financial decisions.
”The fact we can pay our bills and pay them on time was seen as a positive,” Teresi said.
Negative factors stated in the rating included a weak local and regional economy, post employment benefit obligations like the state retirement benefits and health insurance obligations and modest reserves in the city’s unassigned fund balance.
Joe Bellitto, city comptroller, said the new bond rating has already cashed in and led to savings for the city. He said when refinancing the Main and Cherry streets parking garage ramp project last week, the city will now save an additional $500,000. The refinancing of the ramp was projected to save about 2 percent, but with the new bond rating it will save 2.5 percent. In total, Bellitto said the city will save about $1.9 million by refinancing the garage ramp project.
Also, the city will save about $30,000 on a bond insurance payment. Bellitto said there will be additional savings thanks to the new bond rating that cannot even be quantified.
Bellitto said the city’s rating is looked at every time they look for bond financing. He said if the city does not bond any projects, the A-minus stable outlook rating will not expire until 2016.