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Finance staff briefs council on Moody's outlook; Wahpeton described as A1-rated
Summary
City staff told the council that Moody's Investor Services lists multiple risks (energy prices, AI-driven equity volatility) but that Wahpeton currently holds an A1 rating; staff said sales-tax revenue bonds (for projects like the rec center) may carry lower ratings and will be tracked.
City staff briefed the council on Moody's recent credit-outlook note and how it could affect forecasting and future debt issuances. The presenter (Director) said the city currently holds an A1 rating and urged the council to monitor market developments that could affect sales-tax revenue bonds used for future projects.
The presenter summarized six risks Moody's cited, including geopolitical and energy-price risks and the possibility of an equity-price correction tied to AI-sector concentration. He said Moody's can be fickle and that the state-level revenue forecasts may become less optimistic if Moody's outlook changes. “We are rated A 1 right now,” the presenter said.
Staff explained that different types of bonds can receive different ratings; the presenter said most of the city's outstanding debt are refunding improvement bonds typically backed by special assessments and full faith and credit, while future rec-center financing would likely be sales-tax revenue bonds that could be rated lower. Staff also highlighted the city's strong liquidity ratio (reported in the briefing at about 144.6%), noting the city targets a healthy reserve balance to protect its credit standing.
The presenter said he will share Moody's materials in council correspondence and continue monitoring market conditions that may affect borrowing costs and revenue forecasts.
What happens next: staff will circulate Moody's materials to council members and report back if the outlook or local forecasts change materially.
