OCEAN CITY — The Town of Ocean City got good news on its financial position with an upgrade in its bond rating from a major rating agency.
At the close of last Monday’s meeting, Finance Administrator Martha Bennett announced Standard and Poors Global Ratings had raised the Mayor and Council and general obligation bonds from AA to AA-plus, continuing a recent trend. For example, in November, Fitch’s, another notable rating agency, upgraded Ocean City’s bond rating from AA-minus to AA.
Upgraded bond ratings from reporting agencies allow the resort to take advantage of historically low interest rates when it goes to the bond market, which is no small feat considering the number of significant investments in capital projects the resort has on its plate. In no particular order, Ocean City is currently in the process of funding several major projects including an expansion of the Convention Center, a major renovation of the Public Works Campus, and a handful of significant property acquisitions in the south end of town, for example.
To that end, Bennett was delighted with the upgrade in the town’s bond rating from Standard and Poors.
“We got great news on our bond rating,” she said. “I was very pleased to get this report.”
During a fiscal year 2018 budget introduction session the next day, City Manager Doug Miller echoed those sentiments.
“Getting our bond rating raised to AA-plus by Standard and Poors is extremely impressive considering we’re a tourist town on a barrier island,” he said.
Standard and Poors’ opinion said the upgrade from AA to AA-plus “reflected strong management with good financial policies and practices, strong budgetary performance with operating surpluses in the general fund, a very strong debt and contingent liability position and a very strong institutional framework score.”
Standard and Poors credit analyst Danielle Leonardis said the agency considered Ocean City’s economy strong and its budgetary performance strong.
“The rating upgrade reflects the town’s continued access to a broad and diverse economy which supports very strong economic metrics and the town’s strong financial performance,” she said. “The stable outlook reflects our opinion of Ocean City’s strong financial management practices and commitment to make the necessary expenditure adjustments to keep expenditures in line with revenue and maintain strong budgetary flexibility and performance.”
