Following on the heels of the yesterday’s announcements by Fitch Ratings and Moody’s Investor’s Services affirming the City’s bond rating, Standard and Poor’s (S&P) Global Ratings has affirmed its AAA rating on the City of Suffolk’s General Obligation (GO) debt outstanding and assigned its AAA rating to the City of Suffolk’s series 2016 (GO) new money and refunding bonds. S&P also noted the outlook on all of the City’s ratings is stable.
The series 2016 proceeds will be used primarily for capital projects related to schools. The city will also refund a portion of its series 2007, 2010A, 2011, and 2012 GO bonds for interest savings with no extension of maturity.
S&P noted Suffolk’s strong economy with access to a broad and diverse metropolitan statistical area (MSA) and very strong management with “strong” financial policies and practices under their Financial Management Assessment (FMA) methodology. Other highlights include very strong liquidity with total government available cash at 59.1% of total governmental fund expenditures and 4.7x governmental debt service, as well as access to external liquidity considered strong.
The City was noted to have grown and developed steadily over the past several years, primarily in the nonresidential sectors. With Suffolk's economic development team continuing to highlight the significant amount of land available for growth within its boundaries for new businesses, primarily in two development corridors, while continuing to work with existing businesses for expansions.
For fiscal 2016, management estimates a $2.6 million surplus with expenditures comparing well to budget and revenues exceeding budget. The City maintains very strong property tax collection rates in excess of 99%. The 2017 budget is balanced and includes maintenance of its current property tax rate ($1.07), a 2% cost-of-living adjustment for employees, and unfreezes eight public safety personnel positions.