Mayor Paul Soglin announced Friday that Madison earned an AAA bond rating from Moody’s Investors Service, the highest ranking possible, and one that the city has long maintained.
According to the statement, “Only a handful of Wisconsin municipalities and governments receive the AAA rating.”
David Schmiedicke, the city’s finance director, said the ratings are announced whenever the city is about to sell bonds.
According to the statement, the city’s general obligation borrowing will take place Tuesday.
Ald. Mike Verveer, District 4, said the city finds out what interest rates will be received for the bonds in this meeting.
Cities talk with the rating agency to review finances and the economic condition of the city before assigning a rating, Schmiedicke said. The rating assures the city is going to repay bonds, he added.
The purchasers can then have a good understanding of the quality of the bonds, Schmiedicke said.
“This rating is a reflection of confidence in the management of the city’s finances, both now and in the future,” Mayor Soglin said in a statement. “I am pleased with the rating especially in light of the very tight fiscal situation the city is facing because of state aid cuts and levy limits.”
Schmiedicke said there are a number of reasons the city has maintained this rating, citing a conservative approach in the issuance of debt as the most important.
“We repay debt primarily within 10 years,” Schmiedicke said.
Schmiedicke also said Madison and the metropolitan area have a stable economy and a low unemployment rate.
“The city has been very strong in managing finances,” Schmiedicke said. “We [the city] have money set aside that exceeds 15 percent of our annual expenditures.”
Schmiedicke said the mayor’s 2013 capital budget has been proposed but has yet to be voted on.
One important aspect to the budget includes the allocation of funds to renovate Library Mall and State Street in 2013.
Other major design projects that will take place in 2013, which are funded under the budget, include renovations to parts of Johnson Street, North Charter Street, Spring Street and Henry Street, according to Ald. Scott Resnick, District 8.”
“The city is committed to maintaining its strong bond rating by making fiscally sound decisions in the 2013 budget,” Soglin said.