FOR IMMEDIATE RELEASE
October 29, 2015
Contact: Jennifer Kaulius
802.324.2505
Moody’s Investors Service Reaffirms Burlington’s Credit Rating and Outlook
Cites City’s Improved Financial Position and Sound Approach
Burlington, VT – Moody’s Investors Service (Moody’s) has published a new Ratings Report which reaffirms Burlington’s credit rating outlook as “positive” and maintains the City’s credit rating as “Baa2.” Moody’s indicated that one of the events that could lead to a ratings increase for the City includes the audited confirmation of fiscal 2015 surplus (audit is expected to be completed by the end of 2015).
“This positive report from Moody’s is an indication that the long-term effort to rebuild Burlington’s finances is continuing to progress,” said Mayor Weinberger. “As a result of the collaborative work of the Administration, the City Council, and the public, the City’s finances have been stabilized, and a strong foundation for future improvements has been created.”
Ratings Report highlights include:
- “The Baa2 rating reflects an improved financial position, although audited reserves and liquidity remain narrow. The rating also incorporates the dismissal of the Burlington Telecom (BT) lawsuit through a settlement agreement that is favorable to the city…The positive outlook reflects a trend of balanced financial operations in fiscal 2013 and 2014, as well as an expected surplus in fiscal 2015 (unaudited). The liquidity also continues to improve, and the city has not issued tax anticipation notes since fiscal 2013. Additionally, the dismissal of the BT lawsuit and favorable settlement reduces the risks related to the enterprise. The settlement has also allowed the city to address the large nonspendable advances to BT from the General Fund.”
- “The city's financial position continues to improve. Management expects fiscal 2015 audited results to reflect the city's third consecutive surplus, which should increase available General Fund balance (committed, assigned and unassigned) to approximately $4.8 million, or roughly 8.6% of revenues.”
- “The city improved its financial position through the issuance of deficit financing bonds* in fiscal 2013, conservative budgeting and proactive revenue and expenditure enhancements which are expected to result in balanced operations over the near term.”
- “The city's management team since 2012 continues to show commitment to addressing the city's financial pressure with a sound approach and fiscal responsibility which we expect will be aided by the recent adoption of a formal fund balance policy and multi-year capital plan.”
* The deficit financing bond is referred to locally as the Fiscal Stability Bond.
* Moody’s Investors Service Ratings Report from October 23, 2015 is attached.
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