NORFOLK, VA – Moody’s Investors Service, better known as Moody’s, reaffirmed Norfolk’s Aa2 credit rating during its annual surveillance of the city’s existing long-term general obligation bonds.
This rating reflects Norfolk’s regional importance anchored by a strong military presence, efforts to diversify the economy that aid in stabilizing the tax base, proactive and conservative long-range planning and satisfactory reserve levels.
Moody’s highlighted the city’s proactive approach to addressing coastal flooding and social issues, including its commitment to improving the economic power of its residents through several programs that will strengthen economic metrics over time. A notable example provided was the redevelopment of the St. Paul’s Neighborhood utilizing capital plan funding, a $30 million grant from the U.S. Department of Housing and Urban Development to start transitioning current low-income housing to mixed-income housing, as well as $14.4 million from the U.S. Department of Transportation. Further, the city’s efforts in receiving the $112 million HUD National Disaster Resilience Competition grant, the $5 million grant to create a Coastal Resiliency Laboratory to spur economic development by innovating in coastal design, and the 1 penny on the real estate tax rate ($1.85 million) dedicated to resilience efforts were also recognized.
While Norfolk’s elevated debt burden, robust capital plan, vulnerabilities to federal spending reductions, coastal flooding and sea level rise were mentioned, Moody’s also noted that the trend of structurally balanced operations has led to growth in reserves and an increase in the city’s financial flexibility.
This high-quality credit rating will continue to assist Norfolk in receiving low cost of funds on its debt.