City of Bainbridge Island officials are pleased to announce that the City has received the highest credit rating that can be achieved from Moody's Investors Service, a municipal credit-rating agency. Moody’s has upgraded the City’s credit rating from Aa1 to Aaa.
A higher bond rating is a strong indicator of the City’s financial health and means the City can borrow money at a lower interest rate. The City is planning to issue $8.0 million in new bonds in December 2019 to help pay for the new $20 million Police and Municipal Court Replacement project. The other $12 million will come from existing City funds. This rating upgrade will lower overall costs for the new building. The City’s purchase of the property is scheduled to close in January 2020.
Key factors for the rating increase include:
- A solid tax base and healthy economy with income indicators and assessed value per capita well above the national average;
- A very strong financial position with ample reserves and liquidity, even taking into account near-term plans to draw down reserves for certain capital improvements;
- A low debt burden and a manageable pension liability;
- Strong financial management practices, including a formal reserve policy and conservative budgetary policies;
- Conservative debt structure with all fixed-rate debt and 94% of existing debt repaid within 10 years.
The City of Bainbridge is now one of only five cities in the state of Washington that Moody’s has scored with a Aaa credit rating. The other cities are Seattle, Bellevue, Kirkland and Mercer Island.
“We are pleased Moody’s has recognized the commitments the City has made in recent years to implement clear financial policies, establish prudent reserves, and maintain conservative fiscal stewardship of the City’s public resources,” said Finance Director DeWayne Pitts.