PELHAM, AL - The City of Pelham remains one of only four Alabama cities to maintain a AAA credit rating from Standard & Poors Global Ratings, meaning the city’s financial footing remains sound.
According to the report, S&P views the city as economically strong and cited recent changes such as the addition of professional city management, coupled with sound financial policies and practices, and strong budgetary flexibility as primary reasons for the rating. Also, Pelham’s diverse tax base and solid economic stability during the COVID-19 pandemic were cited as strengths of the City’s economy.
The rating review was requested in order to issue more than $32.6 million in new debt service to fund infrastructure improvements and capital projects and to refinance more than $22.5 million existing debt on behalf of Pelham City Schools.
“We are pleased Standard & Poors is confident in our financial position,” said City Manager Gretchen DiFante. “Between 2015 and 2020, the City paid cash for $24 million in capital projects. After this bond issue, the City’s debt will be just $4 million more than what it was at the same time in 2016.”
The city’s leadership identified several projects that need immediate attention and will be funded by the new bond issue. One is critical improvements to the water and sewer infrastructure. “At current funding levels, it would take 24 years to replace the aging water mains explained Andre’ Bittas, Director of Development Services and Public Works. “These funds allow us to shorten that replacement process to less than eleven years and replace the mains causing the majority of leaks in the City in the next two to three years.”
The renovation of city hall is also a priority, and design work is well underway. Construction is expected to begin in the next few months.
Funds will also be used to construct a new Fire Station No. 3 on Highway 11, as well as to purchase two new fire trucks to replace Engine 94 and Engine 95. “The construction of Fire Station No. 3 is well underway, and we look forward to the day we can better serve the fastest-growing part of Pelham,” said Fire Chief Mike Reid. “Our new apparatuses will feature major upgrades in equipment and technology, which will allow us to provide excellent fire protection for the neighborhoods serviced by Engines 94 and 95,” according to Reid.
Residents and visitors will soon notice new decorative light poles with LED lighting along Highway 31. “During the comprehensive planning process, the people of Pelham told us they wanted to see Highway 31 cleaned up,” said DiFante. “We have asked our businesses to work with us and make some changes with the goal of making our main thoroughfare in Pelham more aesthetically pleasing. The City is demonstrating a shared commitment with the businesses by investing $6 million in greatly enhanced lighting, which will not only enhance aesthetics but will also improve safety for vehicular traffic,” DiFante added.
The City is also taking advantage of historically low interest rates and refinancing debt for Pelham City Schools. Doing so will save the school system more than $3 million over the next 17 years. ($180,000 per year for 17 years.)
The new debt service will be paid from the city’s one-cent sales tax for education. A recent agreement between the City and the Pelham Board of Education ensures that every cent collected goes to Pelham City Schools. “We appreciate the Mayor and City Council looking out for the best interests of the schools,” said Pelham City Schools Superintendent Dr. Scott Coefield. “The refinancing was financially advantageous for Pelham City Schools; furthermore, the recent tax agreement between the school board and city makes sure the schools received the financial benefits of the city's action,” Coefield added.
You can find the full ratings report at www.standardandpoors.com.