BURLINGTON’S BOND RATING WILL STAY THE SAME.
THAT WORD FROM MOODY’S INVESTORS SERVICE, WHICH HAS GIVEN THE CITY AN A2 RATING ON THE 3.9-MILLION DOLLARS IN GENERAL OBLIGATION REFUNDING BONDS AND THE 1.4-MILLION IN CORPORATE PURPOSE BONDS TO BE SOLD MARCH 10TH. PROCEEDS FROM THE 3.9-MILLION DOLLAR ISSUE WILL BE USED TO FINANCE STREET & SEWER IMPROVEMENTS, WHILE THE 1.4-MILLION DOLLAR SALE WILL REFINANCE…AT LOWER INTEREST RATES…BONDS ISSUED IN 2005 AND 2008. MOODY’S SAYS THE A2 RATING REFLECTS THE CITY’S RECENTLY-IMPROVED…THO STILL LIMITED…FINANCIAL POSITION.
(EXAMPLES OF THE CURRENT FINANCIAL POSITION INCLUDE: MUCH SMALLER-THAN-PREFERRED RESERVE FUNDS, BUT IMPLEMENTATION OF A PLAN TO REBUILD THOSE RESERVES AND OTHERWISE MANAGE THE CITY’S FINANCES…A STABLE ECONOMY, BUT WITH BELOW-AVERAGE INCOMES…AND AN ELEVATED DEBT BURDEN. THE MOODY’S ANALYSTS SAY THERE ARE A COUPLE OF THINGS THAT COULD CAUSE THEM TO RAISE THE CITY’S RATING — SUBSTANTIAL GROWTH IN GOVERNMENT-WIDE RESERVES AND CASH BALANCES, AND A CONTINUED TAX-BASE GROWTH & IMPROVED SOCIO-ECONOMIC PROFILE…..AND THREE OTHER FACTORS COULD BRING THE RATING DOWN — A DETERIORATION OF THE ALREADY-LOW RESERVES…A FAILURE TO RESTORE LIQUIDITY IN THE TIME-FRAME DEFINED IN THE CITY’S 5-YEAR PLAN…AND A WEAKENING OF THE LOCAL ECONOMY, AS EVIDENCED BY FALLING PROPERTY VALUES, INCREASED UNEMPLOYMENT, AND/OR DETERIORATION OF THE CITY’S SOCIO-ECONOMIC PROFILE.
WITH THESE LATEST BOND OFFERINGS, BURLINGTON HAS 39 1/2-MILLION DOLLARS IN OUTSTANDING GENERAL OBLIGATION DEBT.
HAD MOODY’S DOWNGRADED THE BONDS, IT LIKELY WOULD HAVE MEANT A HIGHER INTEREST RATE PAID BY THE CITY.
