Shores rises in the (bond) ratings

By: K. Michelle Moran | Grosse Pointe Times | Published January 6, 2016

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GROSSE POINTE SHORES — Before it even began, 2016 was shaping up to be a good year for Grosse Pointe Shores.

Shortly before Christmas, officials received word from Standard & Poor’s Ratings Services that the Shores’ bond rating was upgraded from AA+ to AAA — the highest rating possible. The Shores is only the second city in Wayne County to receive such a rating. In April 2015, Grosse Pointe Farms got its bond rating upgraded from AA+ to AAA, making it one of only three communities in Michigan with a population of less than 20,000 to receive this rating, joining Bloomfield Hills and Rochester. The Shores can also now claim a spot on this list.

According to the report on the Shores issued by Standard & Poor’s, the city’s bond rating was upgraded for a number of reasons, including “strong budgetary performance,” “very strong budgetary flexibility,” “very strong liquidity” and “strong management, with good financial policies and practices.”

“We’re really happy,” said former City Councilwoman Kay Felt, who didn’t run for re-election in November, but who continues to serve on the city’s Finance Committee. “We’re just very proud of all of the hard work that’s been done, especially by the staff — (Finance Director) Rhonda (Ricketts), the department heads.”

Besides the prestige attached to it, a better bond rating means that the city qualifies for lower interest rates, which means borrowing becomes cheaper.

“Our bond counsel said we can save an additional $18,000 a year if we refinance the major bond for the marina,” City Manager Mark Wollenweber said at a Dec. 15 City Council meeting, referring to the Shores’ bond for its Osius Park harbor project. That bond, at press time, was slated to be refinanced early this year.

The week of Dec. 7, Ricketts said she, Wollenweber, City Councilman/Finance Committee Chair Bruce Bisballe and City Bond Attorney Michael Gormely went to the Standard & Poor’s office in Chicago to explain why they felt the Shores had earned AAA status.

“The presentation was to three analysts in Chicago, extolling our virtues and lack of debt,” Bisballe said.

Ricketts said she felt the meeting “went very well.”

With new financial policies in place and a rising fund balance, the Shores has been on a financial upswing in recent years.

“Our long-term financial outlook is stable, if not improving,” Bisballe said during a Dec. 15 City Council meeting.

Shores leaders greeted the new bond rating with enthusiasm.

“The rating was based on many factors, but overall strong budget management with good financial policies in place make the city a low-risk bond investment,” read a statement issued by the city, in part.