Moody's Investors Service has announced that the City of Cedar Falls has maintained the general obligation unlimited tax (GOULT) Aaa rating on its $3.9 million General Obligation Capital Loan Notes, Series 2022. This is the highest rating achievable by an entity. Cedar Falls has held this rating since 2020.
According to the Moody's Investors Service report, the Aaa rating reflects the City's strong financial performance. The City routinely outperforms its budget and transfers excess reserves to other governmental funds, which have also accumulated strong balances. This has resulted in very robust operating fund balance and cash. Substantial alternate liquidity across other governmental funds further bolsters the City's financial position. Debt is modest because the City cash flows most of its cash needs as opposed to relying solely on the selling of bonds.
Fixed costs are low because debt and retiree health care burdens are modest. Pension burden is more moderate from participation in two statewide pension plans. The City also benefits from the presence of the University of Northern Iowa.
The impact of this exceptional tax bond rating benefits both the City and its citizens.
"Achieving a Aaa rating helps the City receive lower interest rates when we sell debt, which in turn reduces the property tax burden for debt service," said Jennifer Rodenbeck, Finance and Business Director for the City of Cedar Falls. "The City is very proud of maintaining this highest rating from Moody's. Moody's recognizes that the City has sound financial practices which include conservative budgeting, low debt outstanding, and strong cash reserves. These practices were achieved thanks to staff and elected officials that have recognized the benefit of maintaining conservative financial policies."
Moody's Investors Service also included that the stable outlook reflects expectation that the City's financial position will remain strong given its conservative management and significant financial flexibility.
Original source can be found here.
Alerts Sign-up