SOUTH HUTCHINSON, Kan. – Moody’s Investor Service announced it has upgraded the City of South Hutchinson’s bond rating for the second time in less than a year. It raised the City’s bond rating from A3 to A2 equaling the highest grade the City has ever held by Moody’s. The City was previously downgraded twice in 2017 and 2018 from A2 to Baa1.
In its press release announcement, Moody’s praised the City’s “very strong liquidity” and anticipated it to “remain stable for at least the next few years given positive revenues trends and tight expenditure control implemented over the past several years.”
Moody’s went on to add that “the city’s very low leverage provides it capacity to issue a material amount of debt while keeping leverage moderate.”
“Getting upgraded twice in one year is a pretty special accomplishment and a testament to the hard work and fiscal acumen of our city administrator,” said Mayor Brian Garretson. “We know we are in good hands and have complete faith and confidence in our leadership.”
At the end of 2017, the general fund balance had shrunk to just $161,000 on expenses of $2,143,000. Because the city had only enough revenue on hand to cover 27 days of General Fund expenses, our bond rating had been downgraded twice to Baa1. We will end 2022 with about $1.4 million in the General Fund carry over balance after all planned transfers are completed.
“Fiscal discipline is tough to maintain because there are always unlimited wants and finite resources to meet that demand,” stated City Administrator Joseph Turner. “My council makes my job easier because we are aligned in our commitment to ensuring we do not return to the period of fiscal mismanagement of the past.”
The main benefit of an improved bond rating is that it lowers the cost of debt and saves taxpayers money when you go out to bond projects similar to how individuals with higher credit ratings get lower interest rates on home and car loans.
The Moody’s press release can be found here: https://www.moodys.com/research/Moodys-upgrades-the-City-of-South-Hutchinsons-KS-GO-to–PR_907921793
