Lake Zurich government has been deemed more credit worthy by a major rating house, which officials say will result in less cost to taxpayers if the village needs to borrow money.
Standard & Poor's has elevated Lake Zurich from AA to it's highest AAA long-term credit rating. S&P lauded Lake Zurich for a vibrant local economy, good financial practices and strong management in its reasons for the credit-rating boost.
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Mayor Thomas Poynton expressed satisfaction with what he said was recognition of the work by elected officials and professional managers to improve the village's financial position.
"In fact, the overall performance of the entire government organization has been improving," Poynton said in a statement. "The strength of our evolving village bodes well for the future of Lake Zurich and will benefit the quality of life for our families and communities."
Better credit ratings mean the village will pay less interest when it accesses loans through bond sales to investors. Officials said the taxpayers will realize the savings from the village's reduced borrowing costs.
Finance Director Jodie Hartman said Friday the improved credit rating essentially means the village will get more for the dollar if it obtains financing for a downtown revitalization effort or other projects. She said Lake Zurich may have benefited from S&P's a new rating criteria with more in-depth research on municipalities.
Poynton said Lake Zurich's effort last year to spur downtown redevelopment may have been a factor in being deemed a better credit risk.
"This upgrade confirms the confidence and strength that we have always had in the community and reinforces the positive things that have been taking place in the village, including downtown progress, formal multiyear strategic planning, a professional capital improvement plan and metric-driven monthly reports," Poynton said.
S&P's credit rating upgrade praised Lake Zurich for a "very strong economy" that includes a per capita purchasing income at 167 percent the national average and strong budget flexibility. Another plus for the village is that 73 percent of all debt is to be retired within 10 years.
On the down side, Lake Zurich has a $28 million debt in connection with the long-sought downtown redevelopment and interest costs projected to balloon in the next couple of years. S&P also considered the village's large public employee pension liability -- while not unique -- to be a credit weakness.
Hartman said the village doesn't have any immediate plans to take on debt, so the potential cost savings for Lake Zurich from S&P's long-term credit rating upgrade are not known.