The City of Wilmington got high marks for its financial strength following a review by the three major credit rating agencies in May. Along with maintaining current ratings with Fitch and Moody’s, Standard & Poor's upgraded the city’s rating to AAA.
In addition, City Council approved a bond refinancing at their June 6 meeting, which is expected to result in savings of more than $2 million. The city plans to apply the savings toward retiree pension payments.
Like most city governments, Wilmington issues bonds to pay for large construction projects such as the police headquarters (pictured above) and fire stations. The projects are paid back over time, like a homeowner pays a monthly mortgage. The better bond ratings result in lower interest rates and, in turn, lower borrowing costs.
The three agencies determine their ratings based on several factors, including their view of the city’s management of public dollars, the city’s overall financial health and stability, and the amount in the city’s fund balance, which is like a savings account.