Auburn Hills Receives Upgrade to Bond Rating
Standard and Poor’s Gives Auburn Hills AA+
Media Contact: Stephanie Carroll, City of Auburn Hills; 248.364.6802; email@example.com
Auburn Hills, MI—July 15, 2014—The City of Auburn Hills, a dynamic community committed to innovation and growth, announced that Standard and Poor’s has upgraded its bond rating to AA+, from AA given in September, 2013.
According to Mayor Kevin McDaniel “This bond upgrade is a direct reflection of the work by City Council and Staff to make sure we are fiscally responsible. The City has continually maintained good financial practices, which has allowed us to continue to grow despite economic setbacks of the last few years. As we look to the future, we will continue to seek positive changes that allow us to create value and provide top notch services to our citizens.”
The AA+ rating, was based on a variety of factors including:
- The city's budgetary flexibility remains very strong, with reserves above 60% of expenditures for the past several years. Management has no plans to spend reserves below that level in the next few years. Audited fiscal 2013 reserves were $17.4 million, or 72% of expenditures. Fiscal year-end 2014 reserves are budgeted for about $15.2 million, or 65% of expenditures, but management expects them to be higher due to conservative budgeting.
- Auburn Hills' budgetary performance has been strong overall, with near break-even general fund operations and a 4.4% total governmental funds surplus in fiscal 2013. Management expects a 2.2% general fund surplus. Therefore, budgetary performance will continue to remain strong.
- The city's debt and contingent liabilities profile is very strong, with total governmental fund debt service at 4% of total governmental fund expenditures and net direct debt at 40% of total governmental fund revenue. The city currently has no plans to issue additional debt. The overall net debt burden is considered low at 2.1% of market value. Amortization is rapid, with 76% of direct debt schedule to retire in 10 years.
“Auburn Hills’ financial performance has been aided by controlling its labor costs, including fringe benefits. In addition, the City has been able to continue to make significant infrastructure capital investments, without issuing debt, using its operating funds and grant support from multiple sources”, added Gary Barnes, Finance Director.
About Auburn Hills
Auburn Hills is home to 21,000 residents and also serves as Michigan’s global business address, with 40 international corporations from 32 countries housed here, including Chrysler Group LLC and Borg Warner headquarters. Auburn Hills’ residents enjoy the amenities of city and suburban living with parks, a revitalized downtown district and a welcoming city complex with a library and community center. Additionally, the city has five colleges and universities, the award winning Palace of Auburn Hills entertainment complex and Great Lakes Crossing, one of the state’s largest destination shopping centers, providing a variety of cultural, social and educational opportunities to residents, workers and visitors. Learn more at www.auburnhills.org.