The city’s bond rating has again been increased by S&P Global Ratings, according to a statement from Mobile Mayor Sandy Stimpson’s office on Wednesday.
The rating increased from “AA-” to “AA” in response to the city’s “long-term trend of improved financial metrics and is also supported by improved economic metrics and a very strong debt profile,” S&P Credit Analyst Karolina Norris said in the report.
Ratings from leading accrediting agencies like S&P Global can help assure investors a corporation or government entity can meet its financial obligations. Under Stimpson’s administration, the city has continued to aggressively pay down debt and build up a significant general fund surplus over the past eight years. S&P cited those and other strong financial management practices as well as a growing tax base as justification for increasing the City of Mobile’s bond rating in 2022.
“There has not been a time, certainly in recent memory, where the City of Mobile has been in a better position financially. Our finances and our local economy are strong,” Mayor Stimpson said. “With the support of the Mobile City Council and the hard work of all our city departments, we’ve put ourselves in a position to tackle long-standing challenges and seize generational opportunities.”
According to S&P’s recent report, the city and its surrounding areas have a “robust and
growing economy with national importance due to the Port of Mobile.” It also listed transformational and federally backed projects such as the deepening widening of the Mobile Shipping Channel and the relocation of Mobile’s passenger airport to the Brookley Aeroplex downtown.
“Mayor Stimpson has enacted strong fiscal policies, but this rating increase is not the result of one single decision, but the many small decisions our department leaders make every day,” Executive Director of Finance Robert Holt said in the statement. “We’ve benefited from an increase in City revenues, but our staff have also continued to keep costs under control by watching spending and not adding to our debt liabilities.”
The new rating is a dramatic increase from Aa2, the city received from Moody’s Investor Services in 2014. At the time, Moody’s questioned the city’s ability to access resources due to capital needs.
In addition to better fiscal management by the administration, the council approved a sales tax increase to increase capital fund spending. The result of the tax increase created a Capital Improvement Program, or CIP, which gives each individual district its own pot of resources. While Stimpson initially vetoed the sales tax increase, the administration has worked with the council on organizing various capital projects since that time.
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