DeKalb Bond Rating A1 with “Negative Outlook”

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On September 25, 2018, Moody’s Investors Service affirmed the City’s current bond rating of A1. While the City maintained its bond rating, Moody’s assigned a negative outlook to that rating in its most recent rating review.

The negative outlook on the City’s bond rating is largely based on “high and growing pension burden and rising budgetary pressures that are beginning to impact reserves.” In their report, Moody’s cited two factors that could contribute to an improved bond rating. Those factors are a “material reduction in the city’s leverage related to long-term debt and pension liabilities” and “expansion and diversification of the tax base.” Conversely, Moody’s identified several factors that could lead to a rating downgrade in the future, including “deterioration in resident income levels or tax base valuation, declines in the city’s reserves or liquidity, and increased leverage to the city’s debt or pension burden.”

For several months, the City has been engaged in a process of identifying budget balancing measures to improve its overall fiscal health. On September 18, 2018, the City Council was presented with budget-balancing proposals that included significant expenditure reductions and new revenue streams. Discussion of those proposals will continue throughout October and November as the City moves towards finalizing its Fiscal Year 2019 Annual Budget.

Questions regarding the City’s bond rating should be directed to Interim City Manager/Finance Director Molly Talkington at (815) 748-2382.

Complete report below (mouse over image and click arrows at bottom to scroll down)

Bond Rating_092618

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