Fitch Rating Agency Reaffirms Wilmington's AA-Bond Rating Based on Stable Financial Condition of the City
Mayor Purzycki says the Fitch review reflects Administration efforts to regulate revenue and expenditures while building a more solid City financial base
Mayor Mike Purzycki announced today that Fitch Ratings, a global leader in credit rating and research, has reaffirmed Wilmington’s AA- (double A minus) bond rating and has also posted a stable City bond rating outlook for the foreseeable future. The Mayor said Fitch’s positive review focused on the Administration’s efforts to regulate revenue and expenditures to ensure that Wilmington can manage both anticipated and unanticipated financial issues.
“Fitch’s bond rating affirmation is a clear indication that our management of City finances has been very effective,” said Mayor Purzycki. “In fact, Fitch notes that its review is based on a solid operating performance by the City, as well as adequate budget reserves and flexibility which are needed to ensure that Wilmington is prepared for any financial challenge. These include local factors, such as the unknown costs of labor contracts, or national and world affairs that could ultimately affect the City’s projected revenue totals. I express my thanks today to my Chief of Staff Tanya Washington, Finance Director Brett Taylor, Budget Director Rob Greco, Solicitor Robert Goff, Human Resources Director Charlotte B. Barnes, Financial Advisor Geoff Stewart, and Bond Counsels Tim Frey and Sylvia Shin for working together to produce a solid bond rating.”
The Mayor said the Fitch Ratings review is a reminder that everything the City does related to its finances has a lasting effect. He said this includes having the discipline to approve expenditures only when it’s economically feasible, to preserving and developing neighborhoods and businesses as aggressively as possible to add stability to the City’s economic base.
In affirming the rating, which the City uses to elicit a lower interest rate when borrowing money to fund various City projects, Fitch noted that the City’s long-term liabilities are moderate relative to the City’s economic resource base. Fitch said the rating took into consideration potential expenditure pressures arising from spending for public safety and employee contracts.
Fitch said it expects Wilmington to continue to exercise sound budget management and maintain solid liquidity and reserves through the economic cycle. Fitch said the City’s economy benefits from a regional business climate that is attractive to the finance, banking, and credit card industries. It noted that several major financial institutions have operations in the City and surrounding areas, and that a considerable government, pharmaceutical and healthcare presence diversifies and stabilizes the local economy.
Echoing the Mayor’s comments about the fact that all City actions regarding finance and development matter, Fitch noted that the City has experienced growth in the Riverfront District, with two new hotels, an athletic fieldhouse, and an apartment complex adding to existing development in the area. Other developments noted by Fitch are the new transit center on Walnut Street and a new soundstage on the 7th Street Peninsula.
Fitch also noted that while needed development has been occurring, poverty and income metrics are weaker than state and national averages, with a poverty rate of 27%. However, Fitch took note of the City’s efforts to continue to rehabilitate housing that had fallen into disrepair, and the Mayor's 2020 budget, which identifies the remediation of blighted housing as an important issue that the city must continue to address.