Oak Park Maintains A+ Standard & Poor's Credit Rating>
Fiscal year-end 2017 marks the fifth consecutive year of budget surpluses in the general fund for the City that now enjoys a 17% general fund balance, or “rainy day” fund, to protect against unforeseen circumstances and to provide extraordinary budget flexibility. The City expects to continue its trend of higher than budgeted property tax revenues. Property taxes are the City’s largest source of revenue, accounting for approximately 63% of general fund revenue.
Of importance to note, the new rating acknowledges the ever-increasing costs of the City’s pension and retiree healthcare systems. Even though the City has been able to overfund its pension annual required contribution in recent years, the retiree healthcare and pension systems’ liability continues to increase at a rate that exceeds inflation. This requires the City to identify additional means of funding to catch up to the rate of inflation.
“The voters’ approval of a seven mill property tax levy in 2012 to cover public safety retirement costs under the Firefighters and Police Officers Retirement Public Act 345 greatly assisted our efforts to fortify the City’s long-term financial outlook,” states Oak Park City Manager Erik Tungate. “At this time, the millage scheduled to expire in 2019, will likely require renewal and a possible upgrade to meet the rising long-term liability. In addition, we are identifying additional means to cover these liabilities to ensure the City’s future vitality.”
A Standard & Poor’s Global Rating is a forward-looking opinion about a recipient’s overall creditworthiness. It focuses on the recipient’s capacity and willingness to meet its financial commitments. The following conditions contributed to Oak Park’s A+ rating:
- Adequate economy
- Strong management
- Adequate budgetary performance
- Very strong budgetary flexibility
- Very strong liquidity
- Weak debt and contingent liability position
- Strong institutional framework score
About Oak Park: The City of Oak Park is situated on the southern-most border of Oakland County, Mich., and serves as a suburban ambassador to Detroit. Incorporated as a city in 1945, Oak Park’s current population exceeds 29,300 and is home to more than 680 local businesses, including corporate headquarters.
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