Moody's Upgrades Lake Bluff To AAA Rating

While Americans absorbed the news that the U.S credit rating was going to be downgraded, officials received a formal notification that Moody's Investor's Service had upgraded the village from an AA1 to AAA rating.

At the Aug. 22  meeting, officials were told that Lake Bluff’s upgrade came as a direct result of conversations that began last year as part of the firm’s vast recalibration of the public finance sector.

Since the village’s upgrade, the ’s leadership is more confident “that we are taking the necessary steps to properly oversee the village debt, management and governance,” said Village Administrator Drew Irvin.

While the heated national budget talks seemed to abbreviate the debate down to a matter of spending reduction and payment of debt owed, the calculations and considerations that rule the methodology behind a credit rating is more complex and multifaceted.

There are four broad rating factors that dictate creditworthiness: economic strength, financial strength, management and governance and a debt profile by a weighting system of 40 percent, 30 percent, 20 percent, 10 percent, respectively. Economic strength, given the most weight, subdivides into several categories which measure things such as the stability of the local economy, relative socio-demographic strength of the community and absolute valuation of historic growth rates, to name a few.

Now that the village has achieved AAA status, there’s only challenge ahead — maintaining it.

“We also recognize that achieving and maintaining this standing is predicated on results working in our favor that are in our control and results working positively that are out of our control,” Irvin said.