Northport Council Takes a Bond Rating Hike Victory Lap

A trip by council members, mayor and staff has successfully resulted in the City of Northport’s bond rating being increased from AA to AA+ to $42.275 million general obligation (GO) warrants, series 2023 to be issued by the city.

Fitch Ratings bumped the rating up last Tuesday and tonight’s city council meeting was the first opportunity the council has had to take a victory lap. It is the second time the rating has been upgraded in this council’s term.

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The GO warrants, as they are called, are expected to sell next Monday with proceeds used to support financing for recreational projects with the city and for capitalized investments according to a Fitch press release.

The higher rating signifies the issuer is financially sound and has adequate revenues and cash reserves to pay its debts. The risk of default for investors or policyholders is low.

In addition, Fitch announced it has upgraded the city’s Issuer Default Rating (IDR) and the ratings on the city’s outstanding series 2021A and 2021B GO warrants to AA+.

Fitch painted Northport’s financial outlook as stable and credited the city’s manageable growth demands, high revenue raising authority and maintenance of sound reserve levels for the jump. Only about five percent of the city’s total expenditures are utilized to pay debt. Municipal finance experts call that remarkable.

City Manager Glenda Webb told the council to congratulate themselves on sound financial management, “This is a very momentous occasion for a city to be upgraded twice in less than two years.” She likened the bond rating increase to an individual’s credit score rising.

Webb pointed to the hike’s importance as the city approaches one of the largest projects it has ever seen for economic development opportunities and recreational development.

Council President Jeff Hogg told the council and audience, “You can look around at a lot of cities in the State of Alabama and we are head and shoulders above numerous ones, especially ones that are twice our size.”

He called the second increase in less that two years, “unheard off”.

Hogg credited the council’s fiscal conservativity while also pushing the city forward in excellent financial position.

Mayor Hinton, Hogg and the council all credited the hard work of the staff for the city’s economic success. Hinton added that the city may not have received the increase if the city delegation had not raveled to New York City to meet with Fitch.