City of Shakopee credit rating continues at the high level
On May 29, Standard & Poor’s (S&P) confirmed its current credit rating for the City of Shakopee. Shakopee’s General Obligation debt is rated at AA+, placing the city among a small percentage of cities in the United States achieving this high level. This rating is just one notch from a AAA rating, the highest rating available.
S&P does not publish median summary data for cities, but the AA+ rating is comparable to Moody’s Aa1. Below is a comparable rating data for cities across the United States.
Having a high-rated General Obligation debt means Shakopee can borrow money at very low interest rates, saving taxpayers over the life of loans. As an example, debt issued on June 2 resulted in an interest rate of 1.46 percent over 15 years.
The city borrows money for a variety of long-term needs, a common practice that balances the annual financial impact on residents with the building and maintaining of infrastructure to provide city services.
The rating analysts discussed the impact of the city’s growth, economy and effects of the global heath pandemic and the related financial downturn. I am pleased that the rating agency recognized our work to mitigate the financial impacts of the crisis and our underlying strengths as a community to maintain our high credit rating. This includes the financial flexibility to address any uncertainties and the expectation that financial results will continue to remain adequate during the pandemic and returning to strong when the recession concludes. I believe we are on a very solid financial footing and it is encouraging to know that the rating agency agrees.
What the rating agency says
S&P credited Shakopee’s strong financial position to financial policies and practices, positive operating results, available reserves and very strong local economy. The full ratings report can be found under the city's financial health page.