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Waukee Maintains Top Aa2 Moody’s Credit Rating
Moody’s Investors Service announced that the City of Waukee general obligation credit rating will stay at Aa2, to which the City was upgraded in 2017. This rating allows the City to receive more competitive interest rates for repayment of debt. Post-sale, the City will have $65 million of general obligation unlimited tax (GOULT) debt outstanding.
“Maintaining our stable credit rating during a time of such growth is no easy feat,” said Waukee Mayor Bill Peard. “Elected officials work closely with City staff to ensure strong financial management principles are utilized while also delivering quality services and top-notch amenities for Waukee residents.”
Series 2019A Bonds will be used by the City to finance capital improvement projects and equipment purchases. Capital projects include building streets to connect the community to the future Northwest High School, extending Kettlestone Boulevard, a traffic signal enhancement project, City entrance and wayfinding signs, ADA adjustments, park improvements and trail extensions.
According to the Moody’s report, the Aa2 rating reflects Waukee’s “rapidly growing tax base favorably located in the Des Moines (Aa2 stable) metropolitan area, strong resident income indices, ample operating reserves and a modest pension burden.”
The Credit Opinion Report notes that substantial moderation of the debt burden and declines in the City’s fixed costs plus continued tax base expansion could lead to a future rating upgrade. Factors listed which could lead to a downgrade include growth in the City’s debt burden or fixed costs, material declines in operating reserves or liquidity, or weakening of the tax base or resident income levels.
Moody’s Upgrades Waukee Water Revenue Debt to Aa2
Moody’s Investors Service upgraded the City of Waukee’s water revenue debt to Aa2 from Aa3. Concurrently, Moody’s has assigned a Aa2 to Waukee’s $2 million Water Revenue Bonds. These ratings allow the City to receive competitive interest rates for repayment of debt. Post-sale, the City will have $8.2 million of outstanding water revenue debt.
“As Waukee continues to serve a growing customer base and provide additional water capacity, it is good to know that our bond ratings are steadily improving,” said Waukee Mayor Bill Peard. “It helps support the future growth of the community.”
Proceeds from the Series 2019B bonds will finance improvements and extensions to the water utility.
The Credit Opinion Report notes that continued expansion of the customer base could lead to a future rating upgrade, while factors that could lead to a downgrade include declines in debt service coverage or available liquidity as well as material growth in debt levels.
According to the Moody’s report for water, the Aa2 rating reflects Waukee’s “trend of improving financial operations with healthy liquidity and sound debt service coverage in a rapidly growing service area near the Des Moines (Aa2 stable) metropolitan area.”
The Credit Opinion Report notes that significant expansion of the service area could lead to a future rating upgrade, while factors that could lead to a downgrade include declines in debt service coverage and a significant increase in debt levels.