March 4, 2015
Contact: Mike Kanarick
802.735.7962
Upgrade Demonstrates Strengthened City Financial Position; Will Save Taxpayers Money
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“The upgrade of the city’s general obligation rating to Baa2 from Baa3 reflects an improved financial position, although reserves and liquidity remain narrow. The upgrade also incorporates the dismissal of the Burlington Telecom (BT) lawsuit through a settlement agreement that is favorable to the city.”
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“Additionally, the dismissal of the BT lawsuit and favorable settlement reduces the risks related to the enterprise. The settlement has also allowed the city to address the large nonspendable, advances to BT from the General Fund.”
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“The city has improved its financial position through the issuance of deficit financing bonds, conservative budgeting and proactive revenue and expenditure enhancements which are expected to result in balanced operations over the near term. After a $9 million issuance of deficit financing bonds in April 2013, the city has stabilized its cash flow and operations, resulting in a two-year trend of operating surplus.”
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“The fiscal 2014 audited financial statements include an unqualified auditor’s opinion for the first time since before BT’s financial problems became publicly known in late 2009 and reflects an operating surplus of $2.5 million, excluding a special item of $16.9 million, representing a write-off of city advances to BT following the dismissal of the BT lawsuit.”
Moody's Investors Service Ratings -- City of Burlington |
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Date |
Action |
Rating |
Action |
Outlook |
03/03/15 |
Upgraded |
Baa2 |
Revised |
Positive |
04/14/14 |
Affirmed |
Baa3 |
Revised |
Stable |
08/20/13 |
Affirmed |
Baa3 |
Affirmed |
Negative |
04/12/13 |
Affirmed |
Baa3 |
Affirmed |
Negative |
09/20/12 |
Affirmed |
Baa3 |
Affirmed |
Negative |
06/20/12 |
Downgraded |
Baa3 |
Affirmed |
Negative |
03/08/12 |
Placed on Watchlist for Possible Downgrade |
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09/16/11 |
Affirmed |
A3 |
Affirmed |
Negative |
01/07/11 |
Downgraded |
A3 |
Affirmed |
Negative |
07/09/10 |
Downgraded |
A2 |
Revised |
Negative |
03/09/10 |
Placed on Watchlist for Possible Downgrade |
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07/31/09 |
Affirmed |
Aa3 |
Affirmed |
Stable |
04/09/09 |
Affirmed |
Aa3 |
Affirmed |
Stable |
12/07/07 |
Affirmed |
Aa3 |
Affirmed |
Stable |
09/22/06 |
Affirmed |
Aa3 |
Affirmed |
Stable |
06/09/05 |
Affirmed |
Aa3 |
Affirmed |
Stable |
Source: Moody's Rating Reports |
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