Prior to the COVID-19 pandemic, City Council passed legislation authorizing the refinance of outstanding bonds totaling $9,422,000. Earlier this week, that process was completed and it is estimated the city will save approximately $1.7 million over the next 20 years.
“Approximately $900,000 of the savings will apply to the Sewer Fund and the remaining $650,000 cash saved will be in the Water Fund. The remaining $150,000 will impact various funds,” shared City Manager Mark Cundiff. “Over the 20-year period, average annual bond savings of $70,000 represents 0.5% of total water and sewer revenue. Nevertheless, the savings will aid with the replacement of aging utility infrastructure.”
As a part of the refinance process, the city underwent a ratings review with Standard’s and Poor (S&P). Finance Officer Ginger Adams stated, “Despite the COVID-19 impact to the current economy, the city was able to maintain its S&P AA/Stable rating.”
According to the S&P Global Ratings Report, “The stable outlook reflects Sidney’s very strong available reserves, which, due to management’s strong financial practices and policies, we expect to remain very strong. In our opinion, the city’s very strong debt-and-contingent-liability profile provides further rating stability.”
Cundiff added, “The combination of monthly financial reporting to City Council, the formal five-year financial and capital planning processes and the city’s formal debt management plan all played a part in maintaining the AA/Stable rating during this uncertain time. In addition, City Council sets and reviews formal reserve fund policies for all operating and enterprise funds based on cash flow needs. This strong financial framework helped the city weather the Great Recession and will help pull us through the impact of COVID-19 on the current economy. Our Finance Officer Ginger Adams and the entire management team continue to do an exceptional job ensuring that the city remains in compliance with established policies and on sound financial footing.”