Omaha Earns High Bond Ratings

(November 21, 2024)

Omaha's bond rating will remain at one of the highest ratings from Moody's Investors Services and S & P Global.

Following the annual review of the City's 2023 financial condition, S & P assigned its AA+ rating with a stable outlook, the second highest rating. Moody's assigned its third highest rating of Aa2 with a stable outlook on the City's General Obligation Bonds.

In published reports, the bond rating agencies credit Mayor Jean Stothert's strong financial management, conservative budgeting, business and job growth, recent voter-approved General Obligation bonds, and sizeable reserve accounts as factors in the high ratings.

The City's Cash Reserve Funds total $70.5 million up from $11 million when Mayor Stothert was elected.

S & P calls Omaha a "premier economic center with continued positive momentum" and a healthy operating performance, robust budget development process, and long-term plans for infrastructure and capital needs.

"Strong bond ratings are critical to maintain Omaha's strong growth and momentum," said Mayor Jean Stothert. "The bond rating agencies recognize our record of strong financial performance, while reducing our levy five times to make Omaha an affordable city and providing a high level of service to our taxpayers."

Both agencies remain critical of the city's underfunded pensions. The S &P report cites a lack of support from the City's unions to fully fund the pensions, "Omaha's labor unions' reluctance to contribute their actuarily determined contribution continues to constrain material progress in reducing unfunded liabilities".

The Police and Fire Pension Fund was 100% funded 20 years ago, prior to a 2004 contract with the firefighters' union that allowed spiking, reducing the pension funds to approximately 38%.

With funding plans recommended by Mayor Stothert now in place to restore the pensions to full funding, the Police and Fire Pension fund is currently approximately 56% funded, the Civilian Pension Plan is approximately 51% funded.

The 2024 ratings reports follow the overwhelming voter approval of $333 million in General Obligation Bonds on November 5^th to fund major infrastructure, public safety and public facility projects.