S&P Global has notified the City of Grand Junction that it has raised its long-term rating for the City of Grand Junction to AA- from A+. The S&P rating is a credit score that describes the general creditworthiness of a company, city, or county that issues debt and the likelihood that debt will be repaid. As a result, a higher rated city will likely pay lower interests costs than a lower rated city. The best rating given by S&P is AAA and the worst is D.
The rating report issued by S&P states that the higher rating for the City of Grand Junction “reflects our view of the City’s positive operating performance and maintenance of a very strong reserve position, coupled with a reduction in the City’s overall net debt burden. While the local economy has seen a relatively slow recovery from the recession, stable growth in recent years and the broader region’s efforts to diversify the employment base have resulted in an overall stable revenue growth trend in recent years, contributing to the positive operations. Additionally, the implementation and formalization of what we consider strong financial management policies and practices have enhanced our view of credit quality, as management’s efforts have proved fruitful in balancing the budget and replenishing the general fund reserve in a timely manner. We believe these strengths will persist throughout the foreseeable future.”
S&P specifically noted that they view the City’s management as strong and cited the implementation of a five-year general fund forecast and 10-year capital improvement plan as reasons for the upgrade. Other factors that led S&P to upgrade the City’s rating included the city use of historical data and external sources to help forecast revenue streams while taking a systematic and realistic approach to all line items in the budget every year. S&P also highlighted the City’s minimum reserve requirement and the policy requiring a replenishment of that balance if brought to a level below the minimum requirement.
According to City Manager Greg Caton, “Through the leadership of City Council and staff we set out three years ago to improve the City’s financial position. This has taken some time to accomplish, but through strategic decisions and establishing sound financial policies we have now been recognized, and our efforts have been validated, by a very creditable third party. Community members should be very proud of the City’s overall fiscal health.”
S&P also credited the City’s stable outlook and growing local economy for the increase in rating stating that “the City’s growing local economy, which, although slow, has begun to recover from the recent recession and has been growing at a sustainable pace. The outlook further reflects our expectation that the City will maintain its very strong reserves and strong budgetary performance over the next two years, supported by what we consider strong financial management policies and practices.”
If you wish to see the S&P report in full, you can find a link to it here.
Contact: Sam Rainguet, Communications Manager 970-244-1507 or firstname.lastname@example.org