BLOOMINGDALE – Reflecting what officials say is Bloomingdale's commitment to sound financial management, the village's general obligation bond rating recently saw an increase from AA to AA+ by financial services company Standard and Poor’s Rating Services.
AA+ is the second-highest rating possible from S&P; only AAA is higher, according to the company's website.
“If something major happens with a state or local community that received a AA+ bond rating, they should still be able to make all of their financial commitments and pay in a timely manner,” said Jim Henry, communications manager for S&P.
Bloomingdale’s financial position, economic condition, budgetary performance and flexibility, and debt and contingent liabilities were all considered in the decision to raise the rating, according to village documents.
Bloomingdale Mayor Franco Coladipietro said the rise in the bond rating is important because it reflects how the Village Board and staff have been good stewards of taxpayer dollars while providing high-quality services to the community.
“This inspires a great deal of confidence for the businesses that have invested in our community and helps attract new businesses to Bloomingdale,” Coladipietro said.
Gary Szott, the village's finance director, agrees.
The upgrade is a positive reflection of the community and elected officials’ management of financial resources, Szott said.
Bloomingdale is slowly recovering its revenue base, which took a downturn in 2008 because of the economic recession, Coladipietro said, adding the village continues to provide the same services with a smaller revenue base.
S&P raised Bloomingdale’s bond rating from AA to AA+ on July 18. Prior to the upgrade, the village had a AA rating since July 2008, Henry said.
Besides Bloomingdale, the nearby villages of Carol Stream and Roselle also received AA+ bond ratings.
While AA+ is near the top of the scale, the midpoint is BB and the lowest rating is D, which means the obligor failed to pay one or more of its financial obligations, Henry said.
“If we enter another great recession, those who have a rating of BB and below will be more vulnerable to those conditions,” he said.
General obligation bonds are essential financing instruments of tax-supported capital projects, Henry said. These bonds are funded by taxpayer revenue and used by villages for projects that might not be direct sources of revenue, such as construction of roads and bridges.
Bloomingdale’s management of financial practices has been strong within the past few years, he said, adding S&P doesn’t intend to change the rating within a two-year outlook period.
“Given the village has access to the greater Chicago-Naperville-Elgin metropolitan area, we feel it’s unlikely that we’ll change the rating,” Henry said.
A recent ratings summary document showed Bloomingdale had $11.7 million in available reserves and a $1.4 million general fund surplus in 2013.
“We believe Bloomingdale will maintain its strong budget and liquidity position,” Henry said.
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