Moody's Investors Service Improves Burlington's Credit Rating Outlook

FOR IMMEDIATE RELEASE

April 15, 2014
Contact:  Mike Kanarick
                802.735.7962

Moody’s Investors Service Improves Burlington’s Credit Rating Outlook;
Cites Recent Stabilization of General Fund Operations and Terms of BT Settlement as Factors

Burlington, VT – Moody’s Investors Service published a Ratings Report, in which Moody’s improved Burlington’s credit rating outlook to “stable” – revising the City’s rating to “Baa3 stable” from “Baa3 negative.”  In its rating rationale, Moody’s shared the following: 

“The stable outlook reflects the recent stabilization of General Fund operations and management’s commitment to addressing the negative unassigned fund balance in the General Fund and nonmajor governmental funds over the near term.  The outlook also incorporates the terms of a pending settlement in the BT [Burlington Telecom] lawsuit that, if approved by the Vermont Public Service Board (PSB), will significantly limit the General Fund’s liability.”

“This is great news,” said Mayor Weinberger.  “After nearly four years of downgrades and projections of further troubles, Moody’s has taken positive action regarding the City of Burlington.  This improvement is confirmation that, as a result of the collaborative work of the Administration, City Council, and the public, we have turned the corner toward rebuilding the City’s finances.  This news should give us confidence both in our current path and in our community’s ability to overcome major challenges.”

Other Ratings Report highlights include:

  • “Fiscal 2013 audited financials reflect the first General Fund operating surplus in five years of $793,000 (net of bond proceeds) attributable to conservative budgeting of expenditures.”
  • “The [deficit funding] bond proceeds have eliminated the city’s need to rely on short term financing through tax anticipation notes and lines of credit (LOC).  In fiscal 2014, the city established a $10 million LOC but is expected to end the year without drawing on the balance.”
  • Moody’s listing of “[c]losing of BT settlement without alteration of current terms”  as a factor that “would make the rating go up” in the future.

*Moody’s Investors Service Ratings Report is attached.

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Press Release Date: 
04/15/2014
City Department: 
Mayor's Office