Moody’s Investors Services and Fitch Ratings have affirmed the City’s AAA bond ratings, the highest for both rating agencies. According to Finance Director Richard Schnuer, “A high bond rating lowers the City’s interest costs on borrowing because investors are willing to receive lower interest rates on low-risk debt.” Champaign is the only municipality in Illinois outside the Chicago metropolitan area with an AAA bond rating.
In a release announcing the rating, Fitch noted the following “key drivers” of its decision:
• UNIVERSITY PROVIDES STABILITY: Champaign’s stable economic base is anchored by the presence of the University of Illinois.
• DIVERSE REVENUE STREAM: The city’s revenue stream is fairly diverse and includes sales, property and income taxes; the city’s home-rule taxing authority increases financial flexibility.
• STRONG FUND BALANCE: Fund balance levels remain healthy, although the city remains dependent on economically sensitive revenues.
• SOLID MANAGEMENT: Strong and steady financial management is reflected in conservative budgeting, sophisticated and comprehensive internal policies and active expense management.
Moody’s comments were similar, including the following:
• ECONOMY AND TAX BASE: Champaign’s local economy is expected to remain strong.
• REVENUE FLEXIBILITY AND MANAGEMENT: The financial position of the city is expected to remain strong supported by the financial flexibility afforded by the city’s home-rule status and strong management.
• BUDGET MANAGEMENT: Champaign city management has shown a willingness and ability to adjust revenue and expenditures.
Moody’s Investors Services Report
Contact: Richard Schnuer | 217-403-8940 | [email protected]