(Source Harry Minium The Virginian-Pilot, Norfolk, Va. (MCT) — In spite of rising debt levels, the city maintained high ratings from the three major agencies that annually rate the credit risk of cities and counties, officials announced.
The Moody’s, Standard and Poor’s and Fitch ratings agencies each indicated that the city has a “very strong capacity” to meet its debt payments. The ratings of Aa2 from Moody’s, AA from Standard and Poor’s and AA+ from Fitch are only a step or two below AAA, the highest rating available.
A good credit rating is necessary for the city to borrow money at low interest rates.
The city is in the midst of the most expensive project it has ever built, a $123 million consolidated courthouse, and is also building new schools and recreation centers among other projects.
Debt levels have about doubled in the past decade, according to documents in this year’s budget.
City Manager Marcus Jones has recommended a cautious approach to future borrowing to keep the city under self-imposed debt limits.
The city ended the last fiscal year with an $8.4 million surplus. In past years, the City Council might have spent the money, but the council agreed with Jones in September to put $2 million into the city’s reserve fund and hold onto $6.4 million for the budget that begins July 1.
©2012 The Virginian-Pilot (Norfolk, Va.)
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