ERIE — Moody’s Investor’s Service has upgraded the town of Erie’s general-obligation bond rating. The bonds issued by the general fund were assigned a new rating of “Aa1”, reflecting an upgrade in credit quality from the previous rating of “Aa2”, Moody’s second-highest rating.
“The Town of Erie, CO (Aa1) credit profile benefits from a rapidly growing population and expanding tax base with significant capacity to continue its growth trajectory given availability of land for expansion with access to major employment centers within the Denver and Boulder metropolitan area,” the Moody’s credit opinion states. “The credit profile further benefits from a trend of strong reserves as well as low pension and debt profiles. The credit profile is constrained by the town’s reliance of economically sensitive revenue such as sales tax revenue and one-time revenues in the form of construction and permit fees.”
Moody’s identified several credit strengths that factored into its decision to upgrade the bond rating, including solid financial operations with ample reserve levels; rapidly growing population and expanding tax base outside of Denver metropolitan area; and low debt and pension burdens.
Erie’s fiscal management is expected to continue with support from growing revenue streams, including sales tax and developers fees as the town continues to expand. Moody’s also commented positively on the ability to manage the growth with a pay-as-you-go capital plan and the maintenance of substantial reserves levels, which allows financial flexibility.
The town has approximately $16.2 million of outstanding general obligation debt used to finance construction of the Erie Community Center and the Public Safety Building. The debt is repaid through a property tax mill levy (4.512 mills in 2018).
View the complete credit opinion here.