BERWYN – The city of Berwyn had its credit quality rating increased from A- to A at a time when only 30 percent of Illinois government agencies are being upgraded, according to Standard & Poor’s financial research and analysis.
As a result, the city’s credit upgrade will allow it to secure lower interest rates for loans.
A delegation of Berwyn’s financial staff made a presentation before S&P officials Oct. 3 for the upcoming issuance of series 2013A (exempt) and series 2013B (taxable) bonds.
It learned of the rating increase Oct. 18, Assistant City Administrator Evan Summers said.
Essentially, it’s like having the city’s credit score pulled, Summers said.
“We knew we had a good shot at getting the credit rating increased due to the financial reforms we’ve done,” Summers said.
Those include reforming the city’s pension fund, increasing the pension fund balance and creating an emergency fund balance.
“Never in the history of Berwyn have we had an emergency fund balance,” Summers said.
The city will use series 2013A bond proceeds to refund certain obligations to restructure debt and series 2013B bond proceeds to fund a portion of the unfunded liability of the police and the firefighters’ pension fund.
The rating reflects Berwyn’s very strong budgetary flexibility and liquidity, according to Standard & Poor’s credit analyst Blake Yocom. Berwyn’s budget strategy resulted in the city raising cash reserves to 12.8 percent of general fund expenditures.
Mayor Robert Lovero said the city did not have general fund reserves for emergency purposes under past administrations, which created extreme pressure and budgetary risk to the city.
The city recently achieved the Commercial Development Finance Associate (CDFA) Award for Excellence in Tax Increment Finance as well as the fourth consecutive year receiving the Financial Excellence Award from the Governmental Accounting Standards Board (GFOA).