City of Gig Harbor receives upgrade in bond rating status

An upgrade to two separate bond ratings for the city of Gig Harbor means savings for taxpayers and rate payers over the next several years.

The city received notice on March 1 that Moody’s Investors Service upgraded the General Obligation Limited Tax (GOLT) bond ratings for the city from Aa3 to Aa2. Notice received on March 7 informed that the city’s water and sewer bond rating was raised on S & P Global Ratings from AA- to AA.

“It’s really reflective on the whole city I think, as far as administratively,” said Dave Rodenbach, the city’s finance director. “They look at traditional things (such as) they look back at our expenses, they look at our expense growth. This speaks highly of the city’s management.”

The increase in rating for the city’s water and sewer bonds is based on criteria met by the city for those systems which show strong enterprise and financial risk profiles. Other factors involved in the bond upgrade include the city’s location inside Pierce County and its proven record of maintaining good liquidity.

Directly related to this bond upgrade is the management of the city’s wastewater treatment plant by Darrell Winans, the plant supervisor, and the work done by his eight-person team, City Administrator Ron Williams said.

According to Williams, Winans and his team closely watches spending and cost management, designing their own equipment and performing research to maximize equipment management.

“Our guys and gals are always looking at ways to save money and reduce the cost of operations,” Winans said.

Winans and his team have also received outstanding performance awards for the past 10 years from the Washington State Department of Ecology for meeting and/or exceeding state standards.

Factors that could lead to an upgrade in the city’s GOLT rating include a strong operating performance with a trend of financial surplus that boosts the reserve position and leads to an improvement in the city’s general credit.

“It’s a credit rating. This better credit rating lowers the annual payment on the city’s bonds. It comes to a significant savings,” Rodenbach said. “We’re just a good risk because we have a solid history. We have a solid history of growth ... the city has a great name in the market.”

This bond increase is also the result of good management of the city and of city funds by the City Council, Williams said.

“It’s also an affirmation that we’re doing things well at the city. We’re prudent, we’re fiscally sound and we’re running things well,” he said. “It’s a combination of departments that are on top of things, planning for the future and organizing the future.”

Williams also pointed out the guidance and management of Rodenbach in helping gain a higher bond rating.

“None of this would have gone through without Dave and somebody with his level of experience,” Williams said. “We’re very lucky to have a finance department, especially with Dave in the lead, that took charge of that whole thing.”

Rodenbach in turn points back to the strong systems and teamwork mentality within the city that helps make his job easier.

“I would say it’s easy given the management here. It really is. You don’t have to fight to get things done,” he said. “It really speaks to the solidarity of the system here.”

This story was originally published March 16, 2017 at 9:35 AM with the headline "City of Gig Harbor receives upgrade in bond rating status."