Sometimes there are good reasons for going into debt. Some of these may include:
Financing projects over time, with a variety of repayment options and revenue streams.
Minimizing the impact on property taxes.
Ensuring that future stakeholders will pay for their share of public improvements and services.
What does it cost the City if we lose our AA-Bond Rating?
The City of Stillwater currently holds an AA- bond rating on general obligation bonds, and tax notes from Standard and Poor's and Fitch Ratings. Bond ratings measure credit-worthiness. The higher the bond rating, the lower the interest rate paid by the City.
Losing the AA- bond rating would result in the City paying more interest on bonds issued.
Common Debt Instruments That City Governments May Use
General Bond Obligation
Security / Pledge
Taxes and / or revenue
Revenues of the System
Capital or public safety asset
Any public purpose
Water, sewer and drainage infrastructure
Highest rated credit based on ad valorem tax pledge
Typically 1 or 2 notches lower than a city's tax credit.
A table listing common debt instruments that city governments may use.