Moody’s Assigns Aa1 Rating to City of Marion’s GO Bonds
The City of Marion continues to maintain its strong Aa1 bond rating, as assigned by Moody’s Investors Service. Marion has received this rating consistently since 2010 with each issuance of bonds.
As of May 2017, of the 900+ communities in the state of Iowa, only three have a higher rating (Clive, Iowa City and West Des Moines). Only five other communities share the same rating as Marion, including: Ames, Ankeny, Cedar Falls, Cedar Rapids and Urbandale.
Moody’s Investors Service conducts a rigorous analysis of the finances and general management of the operations for cities across the United States. These ratings are used as a measure of confidence in City government upon each issuance of bonds.
The City has approximately $55 million of general obligation unlimited tax (GOULT) debt.
In addition to finances and general management, Moody’s takes into account the overall economic health of the City, including major employers, local residential, commercial and industrial construction, unemployment and other economic indices.
Marion’s economy and tax base, its healthy demographic profile and proximity to Cedar Rapids, as well as its stable financial profile supported by strong reserves and liquidity were all identified as credit strengths.
The favorable rating results in lower rates when the City issues bonds to help fund municipal projects. This stretches taxpayer dollars further.
“This favorable rating reflects a financially healthy City,” said Lon Pluckhahn, Marion City Manager. “We work to be good stewards of taxpayer dollars and strive to do everything we can to keep borrowing costs low.”
The report indicates that while above average, the City’s debt burden will likely remain manageable due to expected continued growth in the City’s tax base and the renewal of the local option sales tax through 2024 which supports capital improvement and redevelopment projects. Marion is currently levying at the general limit of $8.10 but is not using a $0.27 emergency levy available to Iowa cities. The City plans to implement 3 percent of an available 5 percent gas and electric utility fee in fiscal 2018.
The city’s full valuation of $2.6 billion has grown moderately at a favorable average annual rate of 3.3 percent over the last five years.
To view the full report, visit www.moodys.com/researchandratings.