City of Everett Receives AA+ Bond Rating

Mayor Carlo DeMaria is pleased to announce that the City of Everett has received an exceptional “AA+” bond rating by Standard & Poor’s Global Ratings (S&P). S&P is a municipal bond credit rating agency that provides organizations a way to rate their financial situation.

“I am proud of the rating that the City of Everett earned from S&P,” said Mayor Carlo DeMaria. “This rating illustrates our financial stability during these unprecedented times. I am confident that the City will maintain its strong economic stance into the future.”

S&P highlighted the City’s strengths as:

•Strong economy, with access to a broad and diverse metropolitan statistical area (MSA);

•Strong management, with good financial policies and practice under our Financial Management Assessment (FMA) methodology;

•Adequate budgetary performance, with operating results that we expect could improve in the near term relative to fiscal 2019, which closed with operating deficits in the general fund and at the total governmental fund level in fiscal 2019;

•Very strong budgetary flexibility, with an available fund balance in fiscal 2019 of 15% of operating expenditures;

•Very strong liquidity, with total government available cash at 23.9% of total government fund expenditures and 4.1x governmental debt service, and access to external liquidity that we consider strong;

•Very strong debt and contingent liability profile, with debt service carrying charges at 5.8% of expenditures and net direct debt that is 43.5% of total governmental fun revenue, as well as low overall net debt at less than 3.0% of market value and rapid amortization, with 75.6% of debt scheduled to be retired in 10 years, but a large pension and other postemployment benefits (OPEB) obligation;

•Strong institutional framework score.

According to S&P, “The stable outlook reflects our view of the City’s very strong reserve position, conservative budgeting practices, and strong management conditions, which we believe provide it with adequate cushion to absorb any unanticipated declines in revenues or unexpected stagnation in its economy as a result of the uncertain economic recovery or events related to COVID-19.”

The “AA+” bond rating is consistent with the ratings of the prior years in the City of Everett. This high rating provides a very optimistic outlook for the years to come with a strong financial future.

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