Bloomfield Township received good news from S&P Global ratings on Friday, October 2, when officials learned the ratings company had assigned its AAA rating on township bonds, debt, and said its outlook on all ratings “is stable.”
“S&P Global Ratings assigned its 'AAA' rating to Bloomfield Charter Township, Mich.'s series 2020 general obligation (GO) $1.9 million limited-tax special assessment bonds, and to the township's series 2020A $1.9 million and 2020B $2.2 million limited-tax GO bonds. At the same time, S&P Global Ratings affirmed its 'AAA' rating on the township's existing GO debt. The outlook on all ratings is stable,” the report stated.
The AAA rating reflects S&P's opinion that the township has a strong economy, strong management with good financial policies and practices, adequate budget performance with very strong budget flexibility, very strong liquidity, strong institutional framework, but weak debt and contingent liability profile.
The report noted that the coronavirus pandemic has caused the national economy to experience recessionary pressure and the recovery will be slow, however, “Bloomfield Charter Township is benefiting from economic development and population growth that support its sustained budgetary balance and a very strong reserve and liquidity position. We expect these factors should help the township navigate potential challenges related to the COVID-19 pandemic and recessionary pressures.
“Relative to other 'AAA' municipalities, Bloomfield Charter Township has an extremely strong economic base, as evidenced by very strong income and market value. It also has very high fixed costs for debt service, pension, and other postemployment benefits (OPEBs). To address the high pension and OPEB costs, management has proactively developed a plan to maintain its high pension funded ratio, improve its OPEB funding, and continue to post balanced financial operations. The township has a strong history of adjusting its budget when necessary, and as a result, we expect it to maintain its reserves and cash on hand at levels we consider very strong.”