Tuesday , August 05, 2014 - 4:23 PM
BOUNTIFUL – A bond rating company has withdrawn its AAA rating for the city of Bountiful, but officials in city hall are downplaying the change.
In a business press release issued Friday, Fitch Ratings announced it has withdrawn its AAA general obligation rating for Bountiful. The release said Fitch no longer considers the top credit rating to be “analytically meaningful.”
City Manager Gary Hill insists the withdrawal is a routine action by Fitch, and not a downgrade. He said Fitch withdrew the rating because the city’s revenue bonds have been paid off and there is no more indebtedness for which a rating is relevant.
“This is not a downgrading. If and when we go to the market again to issue bonds we will request another rating,” Hill told the Standard-Examiner.
The stability of city finances has long been a source of pride for city officials. Property taxes have not been raised for over three decades
The city currently has four outstanding bonds, according to Kim Coleman, city finance director. Three are small bonds, which are scheduled to be paid off in the next two years. The fourth bond, issued in 2011, is the $15.2 million in financing the city secured to fund a power plant conversion from oil-powered turbines to gas-powered for the Bountiful City Light & Power Company. Utility rates were raised at the same time to help fund the bond.
An audit of city finances done in 2013 showed there is still $14 million left to pay off the power plant bond and a cumulative total of $2.57 million to pay off for the other three bonds.
“Our debt situation is in remarkably great shape compared to just about any other government entity around and the city is in very good financial shape. Don’t take that to mean we have excess lying around and that we aren’t extremely frugal. But we are in a strong financial condition,” Coleman said.
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