The City of Atlanta announced that Moody’s Investors Service has upgraded the City’s $232.14 million Water and Wastewater Revenue Refunding Bonds, Series 2017A, to Aa2 from Aa3. The upgrade also applies to approximately $3 billion in revenue bond outstanding debt, and reflects the system’s stable financial position. The rating agency cited strong management and financial performance as key contributors for the new rating.
 
“My administration remains committed to strengthening the City of Atlanta’s financial performance,” said Mayor Kasim Reed. “This upgrade is another indication that we are taking the fundamental steps to achieve financial growth and to provide responsible stewardship of taxpayer funds. I commend the Department of Watershed Management for their continued fiscal responsibility.”

In January 2015, Standard & Poor’s Investor Services and Fitch Ratings upgraded the City’s Water and Wastewater Revenue Refunding Bonds to AA- from A+. Fitch Ratings also revised its outlook for the bonds from stable to positive.

Atlanta has successfully complied with a 1998 federal consent decree by completing more than $700 million of rehabilitation and separation of its combined sewer system on time and under budget. The City continues to make significant progress on a 1999 federal consent decree to reduce sanitary sewer spills into the Chattahoochee River. As a result of these accomplishments, Atlanta was able to secure an extension on its federal consent decree obligation from 2014 to 2027. The extension alleviates some near-term financing needs without detracting from intended environmental protection.

“This credit rating upgrade directly benefits the 1.3 million people the Department of Watershed Management serves every day,” said Commissioner Kishia L. Powell. “We’ll realize lower debt service costs, and those savings provide greater flexibility to invest in the upgrades to our water infrastructure that we so desperately need.”

“We are pleased that the rating agencies are recognizing the City of Atlanta’s commitment to provide world-class water and wastewater services to our customers," said Jim Beard, Chief Financial Officer. "The Department of Finance continues to refine our pay-as-you-go model, enabling the Department of Watershed Management to meet its operational objectives without upward pressure on rates in the foreseeable future."

After taking office during the worst economic downturn since the Great Depression, Mayor Reed has put Atlanta in its strongest financial position in 40 years. The City has balanced seven consecutive budgets while building cash reserves from $7.4 million to $153 million today, all without raising property taxes. The City of Atlanta has also received seven credit-rating increases to AA+ from S&P, Moody's and Fitch, the second highest rating a city can have.

Bonds are secured by net revenues of the water and wastewater system, net of sales tax revenues collected for system maintenance and operation expenses. The ratings impact how easily governments can borrow money.