Moody's Investors Service Upgrades Burlington's Credit Rating to "A2"



November 29, 2017
Contact:  Katie Vane

Moody’s Investors Service Upgrades Burlington’s Credit Rating to “A2”

Cites City's Improved Financial Position, Sound Reserves Following Four Consecutive Years of Operating Surpluses; Affirms Burlington Electric’s A3 Rating

Burlington, VT – Moody’s Investors Service upgraded the City of Burlington’s credit rating from A3 to A2 on Monday, November 27, 2017 (please see this Burlington ratings table ). In its Credit Report, Moody’s stated that “The management team, in place since 2012, remains committed to improving the city's financial position.”


“This is great news, and another sign of our growing financial and economic strength. Like the two other upgrades since 2014, this action by Moody’s will keep millions of dollars in the pockets of Burlington residents and improve our City and school district infrastructure in the years to come,” said Mayor Miro Weinberger. “I am grateful for the partnership of the City Council in this progress, and for the work of the entire City team, including our Department Heads, who have continued to improve our public services while controlling expenses, and our Clerk-Treasurer’s staff for all they have done to turn around the City’s finances.”

Additional highlights from the Moody's report include:

  • “The management team, in place since 2012, remains committed to improving the city's financial position. The city adopted a fund balance policy in 2015 with which it reached compliance well ahead of schedule. In fiscal 2016, the city eliminated the material weaknesses found in prior audits. In addition, the city is adhering to a recently adopted ten- year capital plan that will address deferred maintenance.”
    “The city remains committed to improving its financial position and has generated four consecutive surpluses (audited 2013-2016). Management adheres to the fund balance policy adopted by the Council in 2015 which targets an unassigned fund balance of 10-15%. The city achieved its fund balance policy goal in fiscal 2016, well ahead of schedule.”
  • “The upgrade to A2 reflects the city's improved financial position with sound reserves following four consecutive years of operating surpluses, as well as the city’s strength as the economic center of Vermont (Aaa stable). The rating also incorporates rising fixed costs in the face of a somewhat challenging revenue raising environment, significant pension liabilities and ongoing enterprise risk associated with Burlington Telecom (BT).”


Future actions that could lead to another rating upgrade include:

  • Continued surplus operations and material growth in reserves and liquidity
  • Final resolution of BT sale

City Council vote takes next step toward resolving Burlington Telecom (BT) sale impact on ratings

The Moody’s report was issued Monday afternoon prior to the City Council’s Burlington Telecom vote earlier this week.  Moody’s notes in its report that credit challenges could arise from “Continued delays in the sale of Burlington Telecom,” and that factors that could lead to a downgrade include “Retention of significant contingent liabilities resulting from sale of Burlington Telecom.” Moody’s stated that “We will monitor the sale process and any contingent liability that may arise.”

The City Council’s vote to approve a new offer led by Schurz Communications valued at $30.8 million puts the City on a clear path towards resolving these credit challenges. The Mayor is now working with Schurz to negotiate in writing what the company verbally committed to at the November 27 City Council meeting, and to ensure the sale process concludes within the timeframe dictated by the 2014 Citibank settlement agreement.


Moody’s affirms Burlington Electric Department’s A3 credit rating

In a separate ratings report, Moody’s affirmed Burlington Electric’s A3 rating, citing a number of credit strengths, including:


  • “Strong and focused management working on industry transition, including ensuring utility fixed cost recovery through rate structure”; and
  • “Diverse and substantially renewable power supply resource mix, which mitigates industry challenges such as market price disruptions and carbon regulation.”


Burlington Electric General Manager Neale Lunderville stated: “Achieving a Moody’s A3 rating is a testament to the hard work of our great team – starting with our customers and extending to our Burlington Electric frontline staff and to City Hall. I offer special praise to our BED power supply and finance teams, as well as to our Burlington Electric Commission, for their steady focus on improving our finances, and to the entire Burlington Electric family for delivering exceptional service to our customers. As the Moody’s rating confirms, our continuous focus on strong financial management and on adapting to a changing energy market allow our team to lead on energy innovation.”



Global Long-Term Rating Scale
Rating Symbols and Definitions


Obligations rated Aaa are judged to be of the highest quality, subject to the lowest level of credit risk.


Obligations rated Aa are judged to be of high quality and are subject to very low credit risk.


Obligations rated A are judged to be upper-medium grade and are subject to low credit risk.


Obligations rated Baa are judged to be medium-grade and subject to moderate credit risk and as such may possess certain speculative characteristics.


Obligations rated Ba are judged to be speculative and are subject to substantial credit risk.


Obligations rated B are considered speculative and are subject to high credit risk.


Obligations rated Caa are judged to be speculative of poor standing and are subject to very high credit risk.


Obligations rated Ca are highly speculative and are likely in, or very near, default, with some prospect of recovery of principal and interest.


Obligations rated C are the lowest rated and are typically in default, with little prospect for recovery of principal or interest.

Source: Moody’s Investors Service Rating Symbols and Definitions, February 2016,

*Please see the City of Burlington and Burlington Electric Department Moody’s Credit Reports.

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Press Release Date: 
City Department: 
Mayor's Office