The city’s bond rating has been upgraded by Fitch Ratings to AA, Memphis Mayor Jim Strickland said Wednesday, June 20.

The city’s rating had been AA-.

Fitch upgraded the bond rating just past the end of the city’s budget season with city council passage of a $685 million operating budget and an adjusted city property tax rate of $3.19 – all of which takes effect with the July 1 start of the new fiscal year.

The Fitch report received by the city Tuesday cites “the city’s continued operational stability while continuing on its track to fully fund actuarially determined pension requirements by fiscal 2020.”

Fitch also said increasing home values and the city’s financial reserves as well as announcements of expansions by FedEx Corp. and St. Jude Children’s Research Hospital – each at dollar amounts over $1 billion – were factors.

In a written statement, Strickland said the higher bond rating, which translates to the ability to borrow money at a lower rate or cost, is confirmation that his administration’s emphasis on core services is working.

The city uses bonds to finance most of its large capital projects, paying off the debt over 20 to 30 years in most cases.

“Our increasingly positive financial situation is an indicator that we’re doing things the right way at City Hall: being efficient with spending, prioritizing core services, being frank about our challenges, and working together to find solutions,” Strickland said.