CHARLESTON, S.C. (WCBD) – Two of the largest credit rating agencies this week reaffirmed the City of Charleston’s Triple-A bond rating as it navigates the coronavirus pandemic.
Moody’s Investor Service and Standard and Poor’s (S&P) made the announcement on Wednesday. It’s the highest possible bond credit rating.
City leaders say in determining the bond rating, credit agencies review several economic factors and the city’s budget to make a projection about the city’s financial strength moving forward.
A triple-a rating indicates a very strong economy and a fiscally sound budget.
“Much like an individual’s credit score affects their ability to borrow money, a city’s bond rating influences the interest rate on its loans,” city leaders said. “Securing the highest possible bond rating ensures the city of Charleston can take advantage of low interest rates, which saves taxpayers money.”
Moody’s Investor Services applauded the city’s “proactive budget management” and its “demonstrated ability to align expenditures with revenues and maintain strong financial reserves, even during a period of relatively weak revenue performance during the pandemic.”
They also indicated that Charleston’s economy “is competitively positioned to resume growth as the national economy recovers.”
S&P cited Charleston’s strong economic outlook, too, and credited the city’s “strong management, with good financial policies and practices,” as a key component to giving its highest rating.
Mayor Tecklenburg told News 2 that this score is much more than a rating; it’s proof that the City of Charleston is resilient.
After a $40 million revenue deficient for the city brought on by the pandemic, Mayor Tecklenburg said “it’s important to be able to come back if you will when you’re down and out.” That comeback allows the city to take advantage of low interest rates while also saving taxpayer money.
“Our economy is turning back on, we’re very resilient, we’ve come through a tough year, but given the leadership, we’ve had from our budget and finance folks, and all our finance folks really enabled the city to be resilient economically,” said Tecklenburg.
Much of that resiliency was seen in the city’s departments who were able to keep their employees but lost most funding and had to postpone some projects on the docket for the year.
Laurie Yarborough, the Director of Parks and Recreation for the City of Charleston, said she found the changes to be easier for her team when comparing it to taking a fireman out of a firehouse or combating flooding. Also having been a part of the City’s team since the Great Recession from 2007-2009, she said it was not much different.
Yarborough explained, “Even during these tough times when amounts of money been tight and we’ve been able to do. We understand that our citizens can’t take care of everything through taxes so we’ve been reaching out—creating new people to work with, new revenue streams and it’s allowed us to continue to serve the public.”
She went on to note that the city has just as much responsibility to provide public services and sanitation as they do to have parks and recreations.
Between the City and Charleston Water Systems, refinancing has saved well over $20 million in future bond payments.
Mayor Tecklenburg said this ultimately helps the city invest in its future and affordability. One of the ways to do this is through the city’s plan to use the rating to assist in breaking ground on new affordable housing units similar to the one on Lee Street in a few months.