In January 2014, Auburn citizens received the outstanding news that Standard & Poor’s (S&P) had affirmed the City’s AA+ credit rating. In September 2009, Moody’s Investors Service affirmed the City’s rating at Aa3. In 2010, Moody’s converted its ratings of municipal bonds to the same rating scale used for corporate securities. As a result of the scale conversion, Moody’s changed the City of Auburn’s rating to Aa2.
The January 2014 S&P rating report cited the City’s strong management, as well as it’s “consistently strong financial profile, indicated by its very strong budgetary flexibility and liquidity” as factors that were considered in the rating. Another factor that was considered by S&P was Auburn’s status as the “key participant in the Auburn-Opelika metropolitan statistical area, indicating its presence as a regional economic center.” According to S&P, an AA+ rating indicates a “strong capacity to meet financial commitments.”
The June 2010 Moody’s rating report cited the City’s “long history of solid financial management, conservative budgeting practices and high reserve levels” as among the factors considered in rating the City’s credit, noting that “economic activity has helped increase the size of the tax base, which has grown an average of 11.2% over the past five years.” The S&P report rated “Auburn’s financial management practices ‘strong’ under its Financial Management Assessment methodology,” commenting that the City’s revenue and expenditures budget is “based on a thorough trend analysis.” Standard & Poor’s commended the City for its financial policies, specifically those for debt management and investments.
The State of Alabama currently has an AA1 credit rating. Huntsville, Mountain Brook and Pelham are the only Alabama cities rated AAA. Other Alabama cities with the Aa2 rating include: Decatur, Dothan, Homewood, Madison, Montgomery and Opelika. A strong bond rating allows the City to enjoy lower interest rates on its bond issues.