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Two Cities Up in Credit Rating

By Sally Maison
Published: Monday, September 7th, 2009

Credit rating news have been bad for most cities this week, but not for Waterville and Delaware City. The two cities received improved ratings from two different scorers, giving officials and residents reason to rejoice amidst this lengthening recession.

Moody’s, a scoring company which holds 40% share of the world’s credit rate market, raised Delaware City’s score from A1 to Aa3 yesterday. This is despite growing unemployment in the city as well as moderated taxable valuation. Moody’s cited strong fiscal policies of the city and its flexible tax base as reasons for raising credit ratings. The credit rate company also pointed resilient practices and policies of administrators as significant factors. This increase in credit rating came shortly after Waterville received a better credit rating from Standard and Poor’s.

Last August 26, McGraw-Hill Company increased scores of Maine State city from A-minus to A-plus. The city’s mayor, Mayor Paul R. LePage, says that keeping taxes down and funds up contributed in this boost. He added that a city that is in the A-plus level is like an individual who has a credit score of 800. Robert Boschen, finance director for Waterville, says that Waterville’s leanness and frugality during hard times contributed to this boost in their score. He also pointed out that good accounting practices of the city also prompted Standard and Poor’s to better recognize the city’s creditworthiness.

On the other hand, Delaware City can now brag that it is highly creditworthy even if it has not yet achieved the highest Aaa rate. Credit rating specialists comment that efforts of city manager Tom Homan, Mayor Windell Wheeler, and director of finance Dean Stelzer helped in achieving a high Aaa level. The three travelled to Chicago last August to present the financial situation of the city to Moody’s analysts.

Waterville residents can walk with heads higher up after gaining a better image. The city, which has two hospitals and two colleges, brags of its fiscal intelligence which the appraisal of Moody’s just recently proved.

This improved credit rating or score for both cities means more than better-looking figures. Now, the two cities will be charged lower interest when borrowing funds. Delaware and Waterville will greatly save on capital improvement projects and bonds for infrastructure. Homan added that the savings of their city will also grow over time.

This improvement in scoring for both cities might mean that America is on its way to overcoming recession. However, while this credit crunch is not over yet, consumers can only keep their hopes high.

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