By James Feichtner
With the growth of Fishers also comes progress. The city recently announced an upgrade in their financial standing through the Standard and Poor’s Rating Analysis. Formerly an AA rating, the city was bumped up to the status of AA+ in the SPRA of general obligation bond dept.
Fishers City Controller Oscar Gutierrez said that it couldn’t have come at a better time with the Federal Reserve raising its interest rates.
“We were a AA and then we went to a AA+,” Gutierrez said. “Why that is important is that the Federal Reserve (has increased) rates. The rates have been flat so you can borrow money for nothing through the Federal Reserve so the banks can have these really low interest rates. The only way for the city to continue to borrow at those low rates so that we can save money is to have a higher credit rating.”
Essentially, the SPRA is a measure of a city’s credit. With the borrowed interest rates rising, Fishers is still likely to pay a higher rate, but that rate would have been even higher had they not received their AA+ designation this year.
Now at their AA+ status, Fishers is one of the only cities of its kind in the state to have the status.
“We are technically the highest (rated) second class city in the state with a AA+,” Gutierrez said. “That is for general obligation (debt), based on your tax revenue.”
Gutierrez said that the city’s successful economic growth helped it earn the AA+ rating.
“What they do is they take your assessed value divided by the population and that gives you a number,” Gutierrez said. “That is your economic buying power. They look at your median income. So our median income went up and our assessed value went up based on our population. That was our biggest factor in getting a bump up; the economic factor.”
Despite receiving the upgrade to AA+ status, Gutierrez said that they barely missed receiving the AAA status, something no other Indiana municipality has earned. Fishers fell short in SPRA standards by not officially having their capital improvement plan.
“We do have capital improvement plan: Fishers 2020,” Gutierrez said. “They require a five-year capital improvement plan. We have a 20-year capital improvement plan, however, technically it hadn’t passed the city council so we don’t have one. So it is really a technicality. That’s what kept us from the AAA.”
Gutierrez said that with council passing Fishers 2020, he is confident the city will receive a AAA rating during the next analysis.
“We ran a lot of scenarios and, while we didn’t get the AAA this year we are pretty certain we are all set for next,” he said.