04/18/08 — City's Bond Rating

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City's Bond Rating

By Anessa Myers
Published in News on April 18, 2008 1:54 PM

While most other entities' bond ratings are decreasing, the city of Goldsboro's rating has increased -- a sign that despite an uneasy national economy, bond rating officials believe the city is financially well-prepared for the future.

Three bond rating agencies gave Goldsboro a thumbs up, but Standard & Poor's rating was upgraded from an A+ to AA-. The highest rating is AAA.

The rating came as a surprise to Finance Director Richard Durham and City Manager Joe Huffman.

"I keep seeing that bond ratings are going down, and ours went up," Huffman said.

"This is a good thing for our city," Durham said.

A higher rating, he added, helps when the city needs to borrow money.

"A higher rating means they think we are less of a risk, and that will help us get a better interest rate," Durham said.

The improved rating was "based on the city's historically strong financial position, continued tax base growth, strong financial reserves and additional revenue flexibility provided by the city's sales tax," according to the Standard & Poor report.

The city's economy is "significantly influenced by the presence of Seymour Johnson Air Force Base," the report said, noting the 5,150 active duty military personnel stationed there along with 1,120 civilians who work at the base and its annual payroll of more than $282 million.

Other big employers include the Wayne County Schools with 2,710 employees, Wayne Memorial Hospital with 1,480 employees, Cherry Hospital with 1,075 employees, Goldsboro Milling Co. with 1,000 employees and Case Farms with 935 employees.

The Standard & Poor report also said that the city's tax base has grown to $2.051 billion in 2008 -- a 7.3 percent increase from last year -- and noted that the city's reserves have traditionally been strong, with $11.7 million in equity and a $603,000 surplus in 2007 that came mostly from increased property and sales tax revenues.

Overall, Standard & Poor's found the city's financial management practices to be "good."

Moody's Investors Service assigned a rating of A1 to Goldsboro, reflecting "the stable local economy anchored by a military base, healthy financial position and a modest debt burden," according to the report Moody's gave the city Finance Department.

The North Carolina Municipal Council confirmed a rating of 85 for the city, which is comparable to a rating of AA-, according to an e-mail from the council to Durham.

The e-mail continued to state that the rating is a very strong one, "which means management at Goldsboro is doing many things very well, including building reserves and keeping the utilities operating at a profitable level."