City of Gastonia announced today that for the fourth year in a row, national bond rating agency Fitch Ratings, Inc. has affirmed an ‘AA+’ bond rating with a positive outlook for the City. The agency also affirmed the Standalone Credit Profile (SCP) of the City’s water and sewer system at ‘aa+’. Ratings by this agency is generally considered an indication of a city’s financial stability and overall financial health.
A positive bond rating is important to the City and its residents because it affects future growth and economic development. A good bond rating shows investors the stability and quality of the City’s finances, proving its creditworthiness. It also greatly influences interest rates and bond pricing for the future issuance of debt. In essence, a bond rating is like a credit score for a local government.
According to the report, the City’s utility rates are affordable for the vast majority of its customers. Moreover, Fitch does not expect future rate increases to significantly impact affordability. Fitch also found that the cost burden of operating the City’s water and sewer system is very low. Based on the approved Rate Structure Study, which includes rate increases through 2029 and associated Capital Improvement Plan (CIP) totaling $47.4 million, annual capital spending relative to depreciation is strong, and the system does not plan to issue additional debt in the next five years. Overall, the Rating Outlook for the City of Gastonia and its water and sewer system, according to Fitch, remains Positive.
City of Gastonia, which operates as Two Rivers Utilities system, provides retail water and sewer service to customers within and directly around the City of Gastonia. The system is also a regional provider of wholesale water and wastewater services to surrounding towns and municipalities including Belmont, Bessemer City, Lowell, Dallas, High Shoals, Kings Mountain, Stanley, McAdenville and Ranlo, NC and Clover, SC.