The City of Novi received positive financial news for residents and business members in conjunction with refunding bonds to save on debt service payments. Standard & Poor’s Rating Service confirmed the City of Novi’s high quality credit rating of AA+ with a stable outlook.
Standard & Poor’s defines an AA+ rating as a City “having excellent financial security and being highly safe.” The confirmed rating comes following a rating request pursuant to a refunding bond issue on special assessment district bonds that are being paid by the owners of Twelve Mile Crossing at Fountain Walk. The original principal provided $18 million of improvements on surrounding public streets and utilities.
“Today’s bond rating confirmation affirms the City of Novi is making sound financial decisions,” said Novi Mayor Bob Gatt. “This is one objective measure of how the City is managing taxpayer dollars and a testament to the sound financial practices which serve as a hallmark and foundation to all we do.”
Standard & Poor’s notes that “Novi has realized strong residential and retail development in the past decade which includes several malls, a successful convention center, and several hotels, all of which contribute to a retail sales per capital level at 216 percent of the national average. In addition, income levels are very strong, as indicated by the median household effective buying income at 150 percent of the national average. The City’s unemployment rate averaged 6.4 percent in 2011, which was well below the state’s average of 8.4 percent. Through May 2012, the unemployment rate declined further to 5.4 percent, again below both state and national averages.”
The confirmation goes on to state that “Novi has maintained a strong financial position; reserves have been well above the City’s formal policy of maintaining between 18 percent of 22 percent of expenditures. Overall, management’s intent is to stay within the reserve range indicated in the fund balance policy and, as such appropriate excess funds accordingly.”