City’s S&P bond rating improves, finance official says more can be done

s&p

Mayor Michael Nutter’s administration has achieved in the midst of a bad economy something that has eluded his predecessors since 1979.

The city’s $1.3 billion general obligation bonds are now rated an “A minus” with a stable outlook by American financial services company Standard & Poor’s. They were previously rated BBB plus improving.

A bond upgrade typically means the city will have to pay less to borrow while it looks to raise capital. Jimmy Lanham, deputy city treasurer, expects the city to price a $350 million issue—$200 million of new capital and $150 million refinancing—in mid-July depending on market conditions.

“The upgrade will mean more police stations, fire stations, and recreation centers,” he said.

Hilary Sutton, associate director of public finance at S&P, credits “Nutter’s strong fiscal management” for the upgrade. She predicts a 2013 fund balance surplus of $178 million, which is over budget.

In a good sign for Philadelphia’s future, the S&P report noted that the current largest age demographic in Philadelphia is 20-34.

“The city has cut costs,” she said. “The administration has curtailed non-essential services, implemented cutbacks, instituted a hiring freeze, and focused on overtime.”

Reducing costs is only half the picture. Sutton commends Nutter for raising revenues. The receipts for sales, business privilege and AVI taxes have been revised upward.

”The long term situation has improved,” Sutton said. “The city has better finances. The general fund was running a deficit less than three years ago. It had a $146 million surplus for fiscal year 2012.”

Sutton cited in her report the proactive steps that Nutter has taken to manage the city’s pension obligations, but notes they could be a cloud on the fiscal horizon.

Rob Dubow, the city’s finance director, was cautiously optimistic about the city’s bond upgrade, the second this year.

“Among the 10 largest cities in the United States, Philadelphia’s A minus rating is one of the lowest, “he said. “There is still work to be done.”

He and the S&P report point to the much maligned AVI as contributing to the city’s upgrade. AVI shows the true market value of the city’s real estate, he said.

“The city’s wealth is now more accurately reflected,” he said. “Previously, artificially depressed values gave an inaccurate picture.”

By the numbers

1.3 billion—Philadelphia General Obligation Bonds outstanding
$5900—debt per capita
$350 million—bond issue to be issued in July
Fiscal 2012 $146 million fund surplus
Fiscal 2013 $178 million predicted fund surplus



News
Entertainment
Sports
Lifestyle
National

US military tried, but failed to rescue journalist…

The U.S. military earlier this year tried to rescue journalist James Foley and other American hostages held in Syria ,but failed to find the captives.

National

Fate of captured beluga whales in hands of…

A Georgia aquarium went to court on Wednesday seeking federal permission to bring 18 captured beluga whales to the United States from Russia.

Local

After Eric Garner death, religious leaders meet to…

Interfaith leaders convened with city officials to discuss what the community can do to help dial down heightened tensions after Eric Garner's death.

Local

'Suspicious' Hamilton Heights fire caused by power strip:…

An extension cord overload caused the deadly fire in Hamilton Heights late Monday that killed a 15-year-old girl and injured at least 12 others.

Television

'So You Think You Can Dance' recap: Season…

And then there were six. It was a big night on stage as the Top 6 got to dance with each other, All-star partners and perform a solo routine.

Going Out

5 things to do in NYC this weekend…

FILM Lebowski Fest Aug. 22-23, 8 p.m. Various locations, Manhattan $20-$30, www.lebowskifest.com The Dude abides — for 48 hours to celebrate the 1998 Coen brothers classic.…

Television

'Doctor Who' personality profile: the 4 Doctors

When the time comes for a new Doctor, there's always some anxiety over the big question: Who will he be? The series owes its longevity…

Television

Billy Crystal to commemorate late actor Robin Williams…

  Comedian Billy Crystal will pay tribute to late actor Robin Williams at television's Primetime Emmy Awards on Aug. 25, the show's organizers said on…

NFL

Giants expected to work Corey Washington into first-team…

The day of reckoning for the Giants' fringe players will fall upon them Friday night against the Jets.

NFL

Jalen Saunders still unsure what caused car accident…

Jets rookie wide receiver Jalen Saunders spoke to the media Wednesday for the first time since his car accident, but he didn't say a whole lot.

NFL

2014 Fantasy Football: Rankings, list of top NFL…

2014 Fantasy Football: Rankings, list of top NFL defense (DEF)

NFL

2014 Fantasy Football: Rankings, list of top NFL…

2014 Fantasy Football: Rankings, list of top NFL quarterbacks (QB)

Sex

Online dating for every generation

Frank Jackson and his mother Maggie are like lots of modern families: They have dinner together regularly, keep each other updated on their lives —…

Wellbeing

Going green could be the key to getting…

If we could just pursue the things that would actually make us happy, we could help the environment too, according to a New York researcher.…

Wellbeing

Metabolic syndrome could have a sugar link

Scientists in St. Louis may have found another culprit in metabolic syndrome, which can lead to heart disease and type 2 diabetes.  Uric acid is…

Wellbeing

Another way stress hurts your unborn baby

Mothers know to try staying calm during pregnancy, as stress has been linked to behavioral and developmental problems for their babies. But now, a new…