Standard & Poor’s Rating Services has upgraded Saratoga Springs’ bond rating from AA to AA+ for 2012, according to Commissioner of Finance Michele Madigan. S&P also gave the city a stable outlook and a financial management practice assessment of good, revised from stable.
This is a high rating for a municipality, and it will likely payoff when the city borrows money, as the bond rating can influence interest rates.
“The upgrade reflects our assessment of the city’s diverse and expanding economy and increasing reserves. … The rating also reflects our opinion of the city’s participation in the diverse regional employment base of the Albany-Schenectady-Troy
metropolitan statistical area, strong wealth and income, healthy operations that have contributed to what we consider strong finances and low debt with limited capital and debt needs,” a statement from S&P read.
S&P specifically cited the city’s formal adoption of reserve and debt management policies in its revision of the financial management practices assessment. The fund balance policy requires the city to maintain an unassigned general fund balance of between 10 and 12.5 percent of the general fund adopted budget, with provisions for excess and deficit.
“Conservative fiscal practices will be required to retain this rating and we are ready for the challenge. Expense increases from wages, health care, the retirement mandate, and infrastructure projects are likely, and an AA+ rating is an excellent advantage to bring to the table,” Madigan said.