Tuesday, May 29, 2012
Chapel Hill Receives Highest Bond Ratings
Two national bond rating agencies have assigned the highest possible bond ratings to the Town's $1.7 million in two-thirds bonds and $5.5 million of general obligation refunding bonds. The bond ratings are key indicators of the Town's financial strength.
As a part of the process for the sale of the bonds, the Town was evaluated by bond rating agencies, Moody's Investor Service and Standard & Poors. Since 2006, the Town has maintained the highest possible rating, a triple A, from both bond rating agencies.
The rating reflects the quality of Council leadership reflected byas evidenced by the Town's solid financial health, management, overall planning and strength of the local economy. The combined ratings will allow the Town to borrow funds at the best possible interest rates, saving tax payers money for years to come.
"Triple A ratings by both agencies reflects the wise stewardship of our financial resources by the Town Council and our staff," said Town Manager Roger L. Stancil. "Such an achievement by a Town our size is especially noteworthy."
Whenever the Town issues general obligation bonds or other securities, rating agencies re-evaluate the Town's current and future ability to repay debt. The two-thirds bonds, which are expected to be sold on May 15, will finance improvements to streets, bridges and parks and recreational facilities. The refunding bonds will reduce the cost of existing general obligation debt by approximately $390,000 over the next 13 years.
Moody's cited the Town of Chapel Hill's strong financial position with adequate reserves, stable economy and affordable debt profile. Moody's also cited factors that could make the rating go down, including "multi-year trend of structural budget imbalance," "reduction of general fund balance and other reserves" and "deterioration of the Town's tax base."
For more information about the Town of Chapel Hill budget, visit www.townofchapelhill.org/budget.