City of Tecumseh receives A+ Standard & Poor’s rating
The city of Tecumseh recently received an A+/Stable rating from Standard & Poor’s Ratings Services, denoting a “stable outlook” regarding its general obligation bond commitments.
“Every organization typically gets a bond rating, which is an overall assessment of the city’s financial condition,” said Kevin Welch, Tecumseh City Manager. “What it would typically be used for is if you wanted to borrow money. In that case we would receive an A+ rating, which is good.”
The rating survey assesses the community a municipality resides in as well as other factors affecting its financial position. Tecumseh’s rating reflects Standard & Poor’s assessment of the city’s access to the Washtenaw County and Ann Arbor economic bases; good income levels and strong market value per capita; stable financial operations as characterized by very strong reserves; and moderate debt burden.
Reviewers noted, “In our opinion, income indicators are good, with the median household and per capita effective buying income at 100 percent of national levels. The county’s tax base has shrunk 21 percent since 2008, to $235.3 million. Management is expecting flat values in 2013. We consider the county’s tax base to be diverse, with the leading 10 taxpayers accounting for 16 percent of taxable value. Estimated market value totaled $474.9 million, which we consider strong at $56,257 per capita in 2012.”
Standard & Poor’s considers Tecumseh’s management practices “good” under its methodology, and calls the city’s overall debt burden “moderate.”
Welch said the city has received slight improvements over the past couple of years, but could still go up a little more.
“There is an AAA rating,” he said.