York City's financial outlook upgraded to positive
Back-to-back years of fiscal discipline was among the reasons why Standard & Poor's Global Ratings, which publishes financial research and analysis on stocks, upgraded York City's financial status from BB to BBB.
The upgrade means city leaders will be able to borrow funds at a cheaper rate. According to S&P Global's scale, the upgrade is two steps higher toward long-term good credit. The city's overall financial outlook also was changed from "negative" to "positive."
"The city will use the improved credit rating in favorable market conditions to refinance existing debt," said Michael Doweary, York City's business administrator. "The purpose of refinancing is to achieve $3.1 million in net present value savings."
He explained that the city's Vision 2020 plan, a strategic plan set forth to improve quality of life in York City, is a guiding factor as to why city leaders are able to adhere to the overall goal.
The next step is to refinance a 2011 bond. The hope is to shorten the number of debt repayments, saving the city money and allowing city officials to pay off debt sooner. City officials were informed in November 2011 that their financial status took a hit, dropping them into negative borrowing territory.
Doweary said S&P credited the city with recent strong budget performances, especially within the last two budget cycles when property taxes were lowered, as well as operating with a general fund surplus.
Mayor Kim Bracey announced the financial status and rating change Monday at City Hall, surrounded by city officials.
"From the brink of fiscal distress to a bold new chance, I am elated to share with each of you that our third-class city has climbed through the clouds of bankruptcy to higher grounds of investment grade stability and first-class opportunity for all," she said.