RIO RANCHO, N.M.— The City of Rio Rancho is proud to announce that, as a result of the City’s strong financial performance and improved financial policies, Moody’s Investors Service has upgraded the City’s general obligation unlimited tax (GOULT) rating to Aa2 from Aa3.
Bond or credit ratings are a way to assess an organization’s financial well-being, and ratings can affect how the City borrows money. Additionally, investors use bond ratings as a risk assessment tool for investing and buying the City’s bonds. This rating shows that, when the City now borrows money for initiatives like the voter-approved Road, Public Safety, and Quality of Life Facilities Bonds, the City is a highly desirable and more financially sound investment for investors. This translates to more favorable terms for the City, money savings for the citizens of Rio Rancho, and more money available for public services.
“During the pandemic, under the guidance of City staff, I sponsored a resolution to increase our reserve levels to 25% and also advocated for the voters to be given the opportunity to create a permanent fund, which drew strong community support,” said Mayor Gregg Hull. “As a result of these fiscally responsible policies, we will now be able to invest more of our tax dollars in city services as opposed to paying interest to banks on our debt. I am proud of the work we have accomplished for the citizens of Rio Rancho, and this rating is affirmation that we are moving the city in the right direction.”
Over the past two years, the City has taken a prudent approach to financial planning and has adopted policies, such as strong reserve balances and a permanent fund, that are now paying dividends through increased bond ratings that will serve the citizens of Rio Rancho for years to come. The noted rationale for Moody’s upgraded rating stems from the City’s implementation of a financial policy that increased the City’s reserves from 15% to 25%, during the pandemic due to the uncertain economic outlook. Additionally, Moody’s noted that the City’s creation of a permanent fund, which was overwhelmingly approved by voters in the 2022 Municipal Election, was another reason for the upgraded bond rating. According to Moody’s, other factors that led to the City’s upgrade include: “Rio Rancho’s large and growing economy that will benefit from Intel Corporation’s (A1 stable) major expansion in the area. The city’s debt burden is manageable and supported by rapid principal amortization. Pension liabilities are elevated, but expected to benefit from recent legislative reform to the Public Employees Retirement Association (PERA) that mandated increased contributions by employees and participating governments.”
About Moody’s Investors Service
Moody’s is an internationally recognized risk assessment firm that provides services such as credit ratings, risk analyses, and research for stocks, bonds, and government organizations.
For more information about the City of Rio Rancho, visit www.rrnm.gov. Follow the City on Twitter (twitter.com/RioRanchoNM), and like it on Facebook (facebook.com/RioRanchoGov).
ATTACHMENT: Moody’s Investors Service press release