Alabaster secures high financial rating
By NEAL WAGNER / City Editor
Alabaster recently obtained a “high investment grade” rating from Standard and Poor’s rating service, and was able to secure lower-than-expected interest rates when extending a bond issue to help pay for city capital improvement projects, said City Administrator George Henry.
In its rating, S&P praised the city’s “good finances, supported by good financial management practices,” and said Alabaster’s revenues have “exceeded expenditures before transfers for the past three fiscal years.”
“Although officials have not yet finalized the fiscal 2013 budget, they expect this trend to continue in the budget,” read the rating document. “We do not think we will change the rating within the stable outlook’s two-year period because we believe Alabaster will likely maintain, what we consider, good reserves as it manages through the current slowdown.”
The agency praised Alabaster for basing its budgeting on five years of historical data, conducting monthly budget updates and reviews, providing council members with monthly investment holding updates, forward-looking financial planning and having a goal to maintain a reserve fund of $2.5 million.
“It is always great to receive independent confirmation from top-rated financial institutions such as Standard and Poor’s and Moody’s stating without question that we have achieved our goal of placing Alabaster in the top with regard to municipal financing,” said Alabaster Mayor David Frings.
Shortly after receiving the rating, Henry said Alabaster received more positive financial news when it was able to secure an about 3.4 percent interest rate when refinancing and extending a bond issue by three years. The bond series was originally issued in 2005 to help fund the Colonial Promenade, and previously carried a 5.65 percent interest rate.
Extending the bond issue will bring in about $5 million in additional funds to help fund the new Alabaster City Hall building and other “yet-to-be-determined” capital improvement projects while keeping the city’s bond payments the same over the next 15-20 years, Henry said.
The Alabaster City Council voted during its Aug. 20 meeting to approve extending and refinancing the bond issue.