Just a few years ago, River Forest, like many communities around the nation facing the Great Recession, struggled with its finances. There were deficits and questions on how the village government would meet obligations. Reductions in staffing and other budget reductions were made.
Times have definitely changed.
Standard & Poor's has now upgraded River Forest's credit rating to AAA status, the village government announced in a press release Wednesday.
"It's great news," said Palm. He said he was uncertain if this was the first time that River Forest had ever earned the top rating.
In February 2012, the bond rating had been upgraded from AA to AA+.
Palm said the upgrade is the culmination of several years of hard work by trustees and staff.
"We join… an even smaller group as a non-home rule municipality," Palm said. "It's confirmation that we have been doing things correctly from a finance perspective and we're moving in the right direction. The residents of River Forest should be pleased with this news."
The upgrade means the village should get more favorable interest rates if it has to borrow funds, perhaps for the massive sewer project being planned, if the state funding doesn't come through, Palm said.
Spending has come in under budget, and there have been surpluses which have helped replenish fund balances, said Palm. The village has a fully-funded capital equipment replacement fund that contributed to the strong rating. Dollars are available that can be transferred in the event of an emergency; the general fund reserve is at 25 percent, said Palm.
Other factors contributing to the upgrade include the village's passage of a 1 percent hike in the sales tax in 2010, which boosted village revenues. River Forest has also received consecutive distinguished budget awards from the Government Finance Officers Association of the United States and Canada, said Palm.
Moody's, the other major bond rating service, will meet with village officials to talk about a possible shift in that agency's rating as well. The last time Moody's rating for the village came in May 2008 when the service assigned an Aa3 rating to debt River Forest issued to cover infrastructure work. That rating demonstrated a strong creditworthiness, although a modifier of 3 indicated a ranking in the lower end of that generic rating category, according to Moody's.