I believe Madison has enjoyed a Aaa Bond rating as long as I’ve been paying attention – 25+ years. Here’s the latest for city, sewer, water and CDA.
I could rewrite this, but have nothing further to add and its quite succinct!
From: Schmiedicke, David
Sent: Monday, November 25, 2019 6:36 PM
To: All Alders; Rhodes-Conway, Satya V.
Cc: Heikkinen, Thomas; Phillips, Robert; Dave MacGillivray; May, Michael; Ramakrishna, Kevin; Stanek, Jeffrey; McDermott, Patti; Franklin, Craig; Larsen, Laura; Danner-Rivers, Steve; Mabrey, Stephanie; Bottari, Mary; Baumel, Christie
Subject: City Bond Ratings — Return to Stable Outlook
Good Evening Mayor Rhodes-Conway and Council Members:
As you are aware, the city will be selling Water Utility bond anticipation notes and revenue bond refunding bonds next week (December 3rd). The results of that sale will be included in resolutions for your consideration at the December 3rd Council meeting. In advance of the sale, the city sought a rating from Moody’s Investors Service. Moody’s issued its rating today and returned all of the City’s debt (General Obligation Debt – Aaa; Water Utility Revenue Debt – Aa2; Sewer Utility Revenue Debt – Aa2; CDA Lease Revenue Debt – Aa2) to Stable Outlook from Negative Outlook. This improved outlook reflects the steps taken to strengthen the cash position at the Water Utility, including last year’s PSC-approved rate increase, planned future rate increases, surplus asset sales, limits on capital and operating spending, and the 2018 borrowing to repay the loan from the General Fund required at the end of 2017.
Overall, the Aaa rating with Stable Outlook on the City’s GO debt reflects the strength and stability of Madison’s economy, healthy operating reserves, strong fiscal management principles, and relatively low pension and other post-employment benefit liabilities. Madison’s Aaa rating could be affected by contraction of the tax base and weakened resident income levels, narrowing operating reserves, increased debt levels and weakness in the finances of the City’s utilities.
The Water Utility Board and Finance Committee will be meeting on December 3rd prior to the Council meeting to review and approve the Water Utility debt sale.
The Water Utility debt is rated Aa2, with a Stable Outlook. The Moody’s press releases on the ratings are attached. (Madison, Sewer, Water)
Please contact me with any questions.
Thank you.
David Schmiedicke
Finance Director
Department of Finance
