Standard & Poor’s Global Ratings on July 19 boosted its long-term rating from AA+ to AAA on the Town of Garner’s general obligation (GO) bonds. The rating upgrade comes less than a month before an approximately $4 million GO bond issuance by the Town.
In summarizing its rationale for the improved rating, S&P said: “The rating action reflects our view of the town’s maintenance of extremely strong reserve and liquidity positions; improvement in the town’s financial practices management and policies, including the formalized implementation of a capital improvement plan; and robust economic development and planning initiatives.”
It is considered extremely difficult for a municipality Garner’s size to earn a AAA rating from S&P. The Town joins about a dozen other AAA-rated jurisdictions in the region. Several of those jurisdictions—municipalities such as Cary, Durham and Raleigh and counties such as Wake, Orange and Durham—are considerably larger than Garner.
“This improved bond rating is another strong indication of our credit worthiness,” Mayor Ronnie Williams said. “There are no guarantees, but a AAA rating—which is outstanding for a town of our size—could result in better interest rates and terms for future borrowings and bond issuances. The Town Council and staff have worked extraordinarily hard in recent years to implement the fiscal policies and practices that have put us in this enviable position.”
In April 2017, Moody’s Investors Service raised its bond rating for the Town from Aa2 to Aa1, which is also considered to be an outstanding rating for a jurisdiction Garner’s size.
“The rating upgrades from S&P and Moody’s are a sign of all the positive things going on in Garner and a testament to the great work done by Town staff over an extended period of time,” Town Manager Rodney Dickerson said.
In its report released yesterday, S&P highlighted Garner’s “strong economy, with access to a broad and diverse metropolitan statistical area.” It observed that “economic development activity within the town remains vibrant” with the value of building permits in the past fiscal year hitting a 10-year high. The agency also noted that Garner had the second-highest number of commercial permits in Wake County in 2017, trailing only Raleigh.
Looking ahead, S&P said Garner “is set to benefit significantly from continued improvements to the transportation infrastructure in the Raleigh area, including connections with the Raleigh public transit system and the completion of I-540.”
The report praised Garner’s strong management and strong financial policies and practices. It noted that the Town enjoyed “strong budgetary performance, with operating surpluses in the general fund and at the total governmental fund level in fiscal 2017” and “very strong budgetary flexibility, with an available fund balance in fiscal 2017 of 71% of operating expenditures.”
The GO bonds that the Town will issue next month are a portion of the $35.7 in bonds authorized by Garner voters in 2013 for parks and recreation, streets and sidewalks, public safety and services facilities, and redevelopment. To date, the Town has issued approximately $24.5 million of those bonds to fund projects such as a new Town Hall and police station, sidewalks in numerous parts of town, dog parks and other park improvements, and the Garner Recreation Center, which is slated to be completed later this year.
Read the full S&P report.
Learn more about the Garner Bond Program.