The City of Richmond announced on May 9 that its Public Utility Revenue Bond ratings have been reaffirmed by the three major independent bond rating agencies. Fitch Ratings, S&P Global, and Moody’s Investors Service have maintained the AA, AA, and Aa1 ratings respectively for the city’s Public Utility Revenue Bonds.
These ratings are important because they allow Richmond to access capital markets at favorable interest rates as it advances water, wastewater, and gas system improvements. This includes ongoing investments in infrastructure such as the Combined Sewer Overflow program and efforts to improve system resiliency.
Mayor Danny Avula said, “The utility ratings reaffirm this Administration’s strong financial position and our commitment to investing responsibly in the critical infrastructure residents depend on every day. They also reflect sound financial management and the operational improvements needed to continue building a resilient and thriving utility system for the future.”
Chief Administrative Officer Odie Donald II said, “We are very pleased that all the rating agencies reaffirmed both the general fund and utility enterprise fund ratings. It is clear that a path to get to AAA for all of our general fund ratings is attainable by continuing increases in our reserve fund levels. If we are to maintain our very strong Moody’s rating, and see S&P and Fitch raise their ratings, then the City must continue the investment and increased capabilities illuminated through our recent path of historic capital investment.”
David Rose, Financial Advisor to the City, said “Richmond continues to enjoy very strong credit ratings for both their general and utility enterprise funds. The general fund sale results were excellent, and we expect nothing less in the coming weeks for the Utility Revenue Bonds. The City clearly has momentum, and the future is very exciting. During the rating agencies’ in-person visits just a few weeks ago, the energy, increased economic development activity and overall positive growth and excitement around town was clearly evident.”
Fitch Ratings noted that Richmond serves as Virginia’s capital with authority over rate adjustments without external oversight. Fitch considers monthly residential water bills affordable for about 67% of residents based on standard usage levels.
S&P Global highlighted DPU’s strong financial position supported by management practices aimed at strengthening resilience after service interruptions in January 2025. The agency cited operational improvements leading to no service disruptions during recent winter months.
Moody’s stated its Aa1 rating reflects sound debt service coverage despite recent declines with liquidity expected to strengthen based on year-to-date results. Moody’s acknowledged substantial capital needs but credited management’s conservative budgeting approach while noting that its outlook was revised from stable to negative due primarily to challenges balancing affordability with long-term investments.
Director of Public Utilities Scott Morris said: “The rating agencies were clearly pleased that our department has made significant improvements in our operations including our capital improvement plan and our responses to all recent internal and external recommendations regarding our water system following the water crisis of January 2025… A testament to work to date was outcome of one most challenging winters – city utility systems functioned without any major service interruption… The current proposed budget includes difficult but needed adjustments user rates charges support record levels capital investment over next five ten years ensure reliable services continue.”
