Moody’s Reaffirms City’s Excellent Bond Rating
Today, Moody’s Investor Service confirmed an Aa2 sales tax revenue bond rating to the City of Sioux Falls for the upcoming refinancing of bonds used to fund the City’s investment in the Lewis & Clark Water Project. Out of 22 possible ratings on Moody’s scale, only two ratings are above the City of Sioux Falls’ rating.
In issuing this strong rating, Moody’s noted the City’s growing economy and tax base with positive demographic trends; the City’s healthy financial position and ample financial flexibility; and the City’s role as an economic and retail hub, which provides for a resilient sales tax base.
This credit rating follows the City Council’s approval to refinance bonds initially sold in 2007. Although the bonds are backed by the City’s second penny sales tax, they are being repaid exclusively from Water Fund user fees. The City expects to save the Water Fund an estimated $25.2 million by paying off a significant portion of outstanding bonds, refinancing the remaining bonds at a lower interest rate, and reducing the term of the bonds by ten years.
An informational presentation outlining this refinancing was provided to the City Council on September 12, 2017, and can be viewed at www.siouxfalls.org.