Union City’s economic growth has earned it a new credit rating. The city announced that on Sept. 7, Moody’s Investors Service upgraded its credit rating to Aa2 from Aa3 due to its strong financial standing.
According to the Moody’s report, the upgrade reflected marked improvement in the city’s financial position due to ongoing tax base expansion and prudent financial management.
The tax base has also benefitted from strong population growth, a news release said. Census records from 2020 demonstrate Union City’s population increased by nearly 40% in comparison to the 2010 census.
“We are working hard to ‘Reclaim, Renew and Reimagine’ Union City, and this upgrade clearly demonstrates our community is moving in the right direction,” Mayor Vince Williams said in a statement. “We are attracting new investment, enhancing economic vitality and strengthening our financial presence.”
Investors in municipal bonds utilize credit ratings to determine creditworthiness and the capacity and willingness of a state or local government issuing the bonds to pay money back.
According to city manager Sonja Fillingame, a higher credit rating means the city can borrow funds on more favorable terms.
“An upgraded rating is not easy to obtain,” she said in a statement. “This win means the municipal market is watching our financial progress, and our taxpayers will be able to benefit from lower rates for critical public improvements.”
The rating was assigned to the city-guaranteed Revenue Bonds (Union City Project), Series 2022, which are being issued by the Union City Public Facilities Authority.
“A credit rating upgrade is a huge milestone. We will continue our strategy of utilizing a best practice approach for healthy investments and reserves and as well as sustainable debt levels,” assistant city manager Tarsha Calloway said in a statement.
The Series 2022 Bonds will help fortify the city’s goal of implementing its R3 Master Plan, which was created to develop a new framework of recreational amenities within the city, a news release said. The plan includes new parks, trails and streetscape initiatives.
“This exciting news gives additional capacity to help transform our community,” Mayor Williams stated. “It is a path forward and the hallmark of both a strong local economy and a bright future. Onward Union City.”