S&P raises Moses Lake's rating

MOSES LAKE - Moses Lake's municipal bond rating was recently raised based on the city's strong financial performance.

The national rating agency Standard and Poor's upgraded the city from "A plus" to "AA minus," which is the fourth highest rating grade in the agency's multi-tier system.

"Really, that's a fantastic accomplishment for the city," said Jim Nelson, vice president/senior municipal underwriter for the investment with the Seattle banking firm of Martin Nelson and Company.

Nelson told city council members they deserve much of the credit for the improved grade.

"A rating agency looks at the local economy, the city's ability to pay their debt, how much outstanding debt the city has and the city's management practices," Nelson said.

Management is were the council has been most pivotal, he added.

Last March the council voted to raise water, sewer and stormwater rates by 1.3 percent per month to coincide with the consumer price index, which measures changes in the price level of consumer goods and services purchased by households.

Municipalities choosing instead to postpone rate hikes create a snowball effect, Nelson said, making for larger increases in the long run which are shocking to the system.

"If you do the small, regular incremental rate increases, it's easier for the rate payers to budget that and it's easier for staff," he said. "The rating agencies recognize that and they like to see regular and formal practices."

Councilman Brent Reese asked how the city might earn a "triple A plus" rating.

"You're working toward it. You're not too far off," Nelson replied.

Certain factors determine the rating and can't be controlled as much by the city, such as unemployment rates and per capita income.

The higher grade lowers the city's interest rate to slightly less than a quarter of a percentage point, Nelson said.

Council took advantage of the lower rate last week, authorizing the issuance and sale of water and sewer revenue bonds for $4.9 million.

The money raised by the bonds will provide the majority of funds for several water and sewer projects, including the sewer installation in Longview Tracts, construction of a new reservoir in the Larson Subdivision and construction of a detention reservoir at the Central Operations Facility.

"You are timing this sale very well, near a historic low (interest rate)," Nelson said.