Reaffirmation of Triple-A Bond Rating Will Save Money

Two rating agencies recently reaffirmed the city’s “triple A” bond rating and expressed confidence in the city’s financial outlook.

Triple-A is the highest possible rating and saves Rockville taxpayers money by allowing the city to borrow at the lowest possible interest rates.

In awarding the triple-A rating, the agencies showed confidence in Rockville’s ability to meet its financial obligations, cited the city’s conservative fiscal management, its strong policies and practices, ample reserve levels and low direct debt burden.

“The city maintains a strong track of conservative budgeting and strong financial results, due in our view to a very strong management team with embedded formalized financial policies and practices, as well as very strong economic characteristics,” Standard & Poor’s said in its ratings report.

Moodys Investors Service expects the city’s rating outlook to remain strong. “The outlook reflects the expectation that the city’s financial position will remain sound given demonstrated trends of operating stability, fiscal monitoring, and adherence to formal policies,” Moody’s said in its report.

“Moving forward, I can assure you that the city’s Finance staff will continue to give you guidance and make recommendations that are consistent with these statements,” Gavin Cohen, the city’s chief financial officer, said in an email to the Mayor and Council, reporting the ratings.

On April 3, the city sold $14.8 million in general obligation bonds to FTN Financial Capital Markets at a 2.55% interest rate. The bond proceeds will be used to finance ongoing water main rehabilitation and improvements citywide; upgrades and expansion of the District of Columbia Water and Sewer Authority’s Blue Plains Wastewater Treatment Plant, which treats the city’s wastewater; and the purchase and renovation of 6 Taft Court, a three-story building on 2.29 acres of land, where the city will relocate its maintenance and emergency operations from the Gude Drive Maintenance Facility on Rothgeb Drive.

The Mayor and Council are scheduled to vote Monday, May 6 on the adoption of a proposed $138.5 million budget for Fiscal Year 2020, which begins July 1.

For more information on the city’s budget, visit www.rockvillemd.gov/budget.