Chowchilla City Hall
Written by David Castellon
The city of Chowchilla’s general fund has received an “A” long-term rating and an outlook of “stable” from S&P Global Ratings.
That’s the third highest rating offered by the financial services company to businesses, cities and other entities.
A high rating makes bonds issued by Chowchilla and other cities a more confident investment for buyers and can provide opportunities for cities and businesses to negotiate more favorable rates for paying off loans and bonds.
The rating was done to assess the risk on a $3.86 million bond the city is issuing to help fund a series of planned projects expected to cost more than $21 to improve energy efficiency in Chowchilla and its water and wastewater systems.
Those plans include installing a solar array at the city’s wastewater treatment plant, installing energy-efficient lights and heating and cooling systems in city buildings, digging a new city well, installing a 2.5 million-gallon water-storage tank, new well and installing new water meters at homes.
Haddix said the work is scheduled to begin in about a month.
“S&P based this rating and outlook on the city’s strong management, strong budgetary performance, very strong budgetary flexibility, very strong liquidity and a very weak debt and contingent liability position,” states a press release issued by City Administrator Brian Haddix.
“When I came onto the council two years ago, we confronted prior management practices head on with a determination that it would not be business as usual,” Mayor Mary Gaumnitz said in the release, adding that the rating “is solid validation we are on the right track. We have strengthened our debt and investment policies, maintained strong fiscal reserves, and built into our budget a five-year forecast.
Still, the S&P report noted that “We consider Chowchilla’s economy weak.”
The city’s press release notes that with the A rating, Chowchilla can borrow money at lower overall interest rates, saving taxpayers money, and the city will be able to make use of those savings.