In a recent city council meeting, financial advisor David Rose provided an optimistic update on the city's financial status, highlighting a successful bond sale and improved credit ratings. The city secured approximately $45 million through the bond sale, primarily for regional jail and capital improvements, with an impressive fixed interest rate of just under 3.5%. This rate is significantly lower than the estimated 5% budgeted, resulting in an anticipated savings of over $11 million in interest payments.

Rose noted that the city's financial health is the best it has been in over 15 years, with a strong unassigned fund balance exceeding $100 million, which is more than double the city’s policy target of 15%. This surplus is earning an average interest rate of 5%, further benefiting the city's budget.

Despite the positive outlook, Rose discussed challenges posed by credit rating agency Fitch, which downgraded the city’s rating due to factors such as lower median household incomes and educational attainment levels compared to other regions. However, both Moody's and Standard & Poor's maintained or improved their ratings for the city, with Standard & Poor's upgrading Portsmouth to a double A plus rating, reflecting a robust local economy and strong financial performance.

The council was informed that the city’s debt profile remains manageable, with a 10-year payout ratio of 73%, indicating a rapid repayment of debts. Rose emphasized the importance of maintaining a balanced budget and the city’s commitment to fiscal responsibility moving forward.

Looking ahead, the council plans to review updated financial information and budget proposals in early 2024, as they continue to navigate the complexities of local governance and financial management.