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Standard and Poor's upgrades city of Kent's credit rating
Standard and Poor’s upgraded the city of Kent's credit rating from A+ with a negative outlook to AA- with a stable outlook, because of the city’s improved financial standing.
In its Dec. 2 report, Standard and Poor’s stated the increase was based on the city’s progress toward rebuilding its reserve levels, which is due, in part, to proactive financial management and new revenues.
AAA and AA are the highest ratings by Standard & Poor's and D is the lowest.
Mayor Suzette Cooke thanked staff and council members for their dedication to careful cost-cutting, adopting new revenues, establishing financial policies and re-building the city's financial base.
“It is because of these tough decisions Standard and Poor’s has elevated our credit rating back to where it was prior to the recession," Cooke said in a city media release.
Standard and Poor’s noted the improved rating included Kent’s strong economy, budgetary performance and liquidity of finances.
Projections for 2013 show an improved general fund reserve position of nearly 10 percent of expenditures, partly because of a recovery in revenue and certain revenue enhancement resulting in better-than-budgeted revenue.
For 2013, the city is projecting a positive general fund result. Total government available cash is at 20.3 percent of total governmental fund expenditures.
“The efforts we’ve taken as a city are paying off, and we’ve done it while working through the recession and maintaining vital services,” Cooke said. “Our goal continues to be efficient and effective delivery of city services as we move Kent forward.”
City Finance Director Bob Nachlinger said the improved credit rating is a tremendous accomplishment and demonstrates the city's commitment to strict financial policies.
“Standard and Poor’s is an independent agency looking at our internal finances and the numbers tell the real story," Nachlinger said. "This is a very important upgrade for Kent and is a true recognition of the work we’ve done to improve the fiscal picture of this city."
Standard and Poor’s, along with Moody’s Investor Services, issues annual reviews of the city’s financial status focusing on bond rating and credit worthiness.
Moody's last issued a city credit review in September 2012 and downgraded the city to a Baa2 rating from A1. The Moody's ratings range from a top mark of Aaa and then drop to Aa, A, Baa, Ba, B, Caa, Ca and C. Numerical modifiers 1, 2, and 3 also are added to letter-ratings with 1 the highest.