VENTNOR - Standard and Poors Global Ratings recently increased Ventnor City's bond rating to AA from AA-. The increase comes from S&P's recent review of the city's current municipal and school bonds, financial information and economy.
In its Sept. 30 Ratings Direct Summary, S&P noted strong management, good financial policies, strong budgetary performance, adequate operating suplus, strong liquidity, debt and strong economy, according to a release.
We consider Ventnor City's economy strong, the report stated.
S&P cited healthy reserves that provide a cushion for unexpected costs, particularly those relating to the environmental risks of being a coastal community.
Since Superstorm Sandy, the city has undertaken various efforts to protect its tax base from significant weather events and flooding, the summary stated. We believe that the city's approach to ensuring its tax base and infrastructure is protected against environmental risks will help maintain the city's strong economy when coupled with development underway.
The city's resiliency efforts, including its leadership role in developing a regional resiliency master plan for Atlantic County, was highlighted. Also mentioned were the security measures put in place to protect the city from cyberattacks.
Despite the contraction of the casino industry in neighboring Atlantic City and with a population of 9,750, the city's tax base has grown as older homes are redeveloped and renovated, increasing the ratable base. A revaluation in 2017 reduced the number of tax appeals and stabilized the tax base.
The city has an effective buying income of 112% of the national average and a market value of $208,326 per capita.
S&P noted the addition of two newly approved liquor licenses for the Ventnor Square Theater project and Santucci's Pizza, which are both under construction. A third license will likely lead to another establishment over the next 12-18 months.
S&P noted when the current administration took office in 2016, it was after the 2016 budget was adopted with a depleted fund balance.
Budgetary performance improved in 2017 and 2018 by taking a more conservative approach to budgeting which improved the city's financial status. Settling public safety contracts through 2020 helped reduce accumulated absence payouts, increased salary steps, and required the highest level of employee contributions towards health care coverage allowed under state statute.
Since 2016, city's fund balance grew more than 50% to $4.6 million, providing flexibility to absorb unanticipated expenditures, noted S&P. It was further noted that the city has very strong liquidity and that 74.3% of the city's current debt is scheduled to be retired over the next 10 years.
The stable outlook reflects our view of the city's enhanced forecasting and financial planning that we believe indicate the management team's commitment to ensuring the city's strong financial performance over the long term, S&P stated.
Any negative changes in the casino industry will not affect the city's economy, given redevelopment efforts currently underway.
As a result, we do not expect to change our outlook over our two-year outlook horizon, the summary stated.
A bond rating is a rating that independent agencies use to measure the credit quality of a particular bond. The bond rating measures the financial strength of the issuer of the bond and its ability to make interest payments and repay the principal of the bond, when due.
Standard and Poor's believes Ventnor's capacity to meet its financial commitments on the obligation is very strong.
Read the report here.
