NEW: Standard & Poor’s Bumps Johnston’s Bond Rating Up To ‘A’
Tuesday, May 21, 2013
Standard & Poor's recently raised its general obligation debt rating for the city of Johnston from an A- to an A.
According to the latest report from Standard & Poor, the raise is due to its increase in financial performance, improved financial management, and its progress implementing cost-containment measures that will considerably improve its long-term unfunded liabilities.
The rating is expected to remain stable.
GET THE LATEST BREAKING NEWS HERE -- SIGN UP FOR GOLOCAL FREE DAILY EBLASTThe report highlighted Johnston’s improved economy, strong household income, per capita market values, and low net debt. Standard & Poor's reported that Johnston’s credit profile remains slightly weak due to high unemployment over state and national rates and high unfunded pension and postemployment benefits.
Johnston will use the proceeds from the issue to finance the acquisition of open space as well as fund road construction projects.
"Despite a challenging revenue environment over the past several years," according to the Standard & Poor's report, "Johnston's financial position has improved considerably since fiscal 2006, when it had a $5.3 million deficit in the school fund. In 2006, the state of Rhode Island required management to implement stronger internal controls and submit a corrective plan to the office of the State Auditor General for approval. This was a requirement at the time so it could gain approval to levy a supplemental property tax cure the deficit. As part of the plan, the town had to set up a rainy day fund and maintained it at 8% of general operating revenues.
Since that time, according to Standard Poor's, the town's financial performance has improved considerably. "It closed audited 2012 with a combined $2.0 million surplus in the general fund and school fund, equal to 2.2% of general fund expenditures." This marks Johnston's 6th straight surplus, which Standard & Poor's called "notable."
Related Articles
- Pension Showdown in Johnston
- PowerPlayer: Johnston Mayor Joseph Polisena
- Johnston #34: RI’s Best Communities 2012
