For the fifth straight year, Wall Street has re-affirmed Virginia Beach’s standing as the best-managed city in Hampton Roads. All three major ratings agencies have awarded Virginia Beach the highest possible bond rating of Triple-A.
Virginia Beach is the only city in Hampton Roads with Triple-A bond ratings from all three agencies: Fitch, Moody’s and Standard & Poor’s. All three agencies cited Virginia Beach’s exceptional financial management, conservative budgeting practices, healthy reserves and prudent debt management policies.
As a result, on Tuesday, April 8, the city raised $96 million by selling general obligation bonds for various city and school capital projects at a very low interest rate of just 2.92 percent. This will save taxpayers money as the city repays the debt over 20 years.
“Virginia Beach works very hard to maintain its pristine bond ratings,” said Finance Director Patricia A. Phillips. “We are careful not to spend too much money and not to accrue too much debt. It’s gratifying that Wall Street appreciates our conservative fiscal management practices.”
All three ratings agencies praised Virginia Beach’s conservative policies.
- Fitch praised Virginia Beach’s “exceptional financial management” and “conservative budgeting practices.” The agency also noted Virginia Beach’s modest debt.
“Prudent debt management policies have resulted in moderately low and stable debt levels with a rapid amortization rate,” Fitch wrote. “The city’s traditional practice of pay-as-you-go capital funding has kept levels moderate and provides budget flexibility, if necessary.”
- Standard & Poor’s praised Virginia Beach’s “very strong economy,” its “very strong budgetary flexibility” and its “strong debt and contingent liabilities position.”
“The stable outlook reflects our view of the city’s consistent financial performance and very strong economy, which is supported by a very strong management,” Standard & Poor’s wrote.
- Moody’s praised Virginia Beach’s “conservative management approach, healthy financial position with improving reserves, and manageable debt burden.”
“The city's $54 billion tax base has demonstrated resilience through the recession, with the diversity of the local economy and continued strength in tourism activity and the commercial sector staving off the more substantial taxable value declines experienced in neighboring Virginia communities,” Moody’s wrote.
The bonds sold Tuesday will help fund road projects such as improvements to Witchduck and Princess Anne Roads, and the replacement of the Lesner Bridge, and school projects such as the consolidation of the Kemps Landing Magnet School and the Old Donation Center.
To read the ratings reports from all three rating agencies, click HERE.
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