Moody's Reaffirms North Bay's Credit Rating
NORTH BAY, ONTARIO: The City of North Bay has once again maintained its Aa2 credit rating with a stable outlook with Moody’s Investors Service. According to Moody’s latest report, the rating is reflective of “prudent fiscal planning and stable operations” as well as North Bay’s diverse economy.
The report recognizes that the Mayor’s 2016 budget plan “allows the City the opportunity to continue to operate on a consistent basis with reasonable property tax levy increases for the next three years” and noted that Moody’s will continue to monitor the long term planning developments of the City over the next several years for the creation of a long term sustainable plan to address the ongoing pressures facing the municipality. “At the time of introducing the plan, I recognized that it was only a starting point for the City and Council is working on a number of initiatives, including the development of a long term financial plan, to deal with the pressures on a longer term basis” acknowledges Mayor McDonald.
Moody’s report also recognizes the City’s review of the Long Term Capital Funding Policy as a result of budget pressures and the desire to limit debt. In 2012, the Policy provided for $9 million of debt financing for tax levy funded capital projects per year. Council reduced this limit to $8.5 million in 2015 and approved a further reduction to $5 million in debt for the 2016 tax levy funded capital budget with other funding being used to offset the reduced reliance on debt financing. “It is anticipated that the change in policy will, over time, reduce the amount of funds required for principal and interest payments, thereby shifting those payments to pay-as-you-go financing which in turn will continue to help keep future debt levels low.” Council continues to refine this Policy as part of the development of the long term financial plan to ensure that infrastructure needs are maintained over the long term.
Moody’s continues to recognize the City’s ability to successfully fund priority programs and infrastructure projects while recording healthy financial outcomes and maintaining a solid balance sheet with adequate liquidity. North Bay’s debt remains below average when compared with other Moody’s rated Canadian municipalities, while debt service costs, measuring 8.4% of total revenues, remain at a manageable level given the City’s fiscal flexibility.
Other strengths highlighted in the report include the City’s use of forward-looking budgeting practices that enable the City to align fiscal policies with long-term planning; comprehensive, transparent and timely financial reporting; and a stable and predictable revenue profile.
The City of North Bay appreciates Moody’s continued positive acknowledgement of the City’s strong financial position and performance.