ATHENS — The city of Athens is in a strong financial position that will “remain resilient despite capital needs driven by a growing population,” according to Moody’s Ratings.
Moody’s notified city officials this week that it upgraded its issuer and general obligation limited tax ratings from Aa3 to Aa2.
The report noted three credit strengths:
- Strong and improved reserves and liquidity
- Robust economic growth
- Manageable leverage
The Aa2 rating reflects the city’s “strong reserves that continue to equate to a historically high 42 percent revenue,” according to Moody’s. The report attributed this to the rapidly expanding economy as part of the high growth in the Huntsville metropolitan area.
“The city benefits from a lower housing cost when compared to other parts of the region,” the report said. “Management reports that there are currently 4,400 new homes and several big box retail outlets under construction. The city also continues to host a large industrial presence … the sizable commercial presence, alongside the city’s growing taxable base, has led to a strong full value per capita of $150,000 (as of 2024).”
Mayor Ronnie Marks said the rating benefits not only the city but also Athens City Schools, which rely on the city as the school system’s finance agent when borrowing money for capital projects, such as new schools.
“This speaks well of our efforts to provide conservative budgets to the City Council each year, to grow our sales tax base and job opportunities and to look for return on investment with retail projects,” he said.
In addition, Moody’s upgraded Athens Electric’s revenue rating from Aa3 to Aa2, and affirmed Athens Water Services as an A1 rating, both with stable outlooks. Moody’s said the upgrade for Electric “reflects its low leverage, growing system size and limited additional capital needs despite the economic and population expansion within its service area.”
“By maintaining a high-quality rating, Athens Utilities will be afforded lower interest rates for funding future capital improvement projects, which in turn helps us to supply utility services at the lowest possible rates,” said Athens Utilities Manager Blair Davis,
In 2024, Standard and Poor’s increased Athens’ rating from AA- to AA.
“The upgrade reflects an expanding, strong local economy in one of the fastest-growing regions in the state combined with conservative budgetary assumptions and long-term planning that allows Athens to maintain consistent budgetary performance and very strong reserves,” the S&P report said.
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