|Standard & Poor’s “Ratings Direct” July report provided good news to the city of Joplin – the city received a two-step increase in its credit rating--from an A+ to an AA. Ratings range from AAA to C with their definitions expressed in terms of default risk.
Four established areas of credit are generally included in the rating analysis. These include economic, debt, administrative and fiscal factors. S&P recognizes that assessing creditworthiness is more complex than just evaluating financial statements, so it studies socioeconomic issues as well, including income levels and job creation to determine if the borrower can service or repay its debt. Also reviewed are the changing trends in the economy, marketplace and in demographics. Quality of life issues, although harder to quantify. are considered during this process as well.
According to S&P, the AA credit rating reflects the city’s role as a regional retail and service hub, its strong tax base growth, conservative fiscal policies that have resulted in a solid financial position and very low debt levels. According to S&P, the only mitigating factor to these strengths is the below-average income levels found in the local area.
A municipal credit rating is a current opinion of a municipality’s overall financial capacity to pay its financial obligations based upon these relevant risk factors. Credit ratings are generally accepted by investors as efficient tools for differentiating creditworthiness.
“This rating upgrade is good news as it exemplifies the work of the City,” said Joplin City Manager Mark Rohr. “Our staff works diligently to maximize our resources while maintaining expenditures to provide quality services for our citizens. This signifies the city’s efforts to be fiscally responsible with its resources, while at the same time accomplishing major projects within the city to improve the quality of life for our residents and visitors.”
Rohr was referring to the recently completed projects that include Phase I of the Athletic Complex, the downtown renovation, the accreditation of the police department and improvements to many Joplin roadways and troublesome drainage ditches in the stormwater system.