The city of Auburn is a safer bet for investors than it used to be, according to some financial experts.

Moody's Investor's Services, a company that issues ratings on the investment quality of cities and organizations, has removed a “negative outlook” from Auburn's bond rating. The city now has a Baa1 rating with a “stable outlook,” according to a release from Moody's.

The Baa reflects “average creditworthiness relative to other U.S. municipal of tax-exempt issuers,” according to Moody's. The “1” indicates that city ranks on the higher end of that rating, sort of like a plus after a grade.

The Baa rating is the fifth-highest of nine different bond ratings, with Aaa as the best and C as the worst.

Auburn has operated under Baa1 since 1996, when Moody's dropped it from an A rating. The company assigned the city a negative outlook two years ago, according to city Comptroller Lisa Green.

Green said Moody's bond rating is used by banks or firms to figure out an interest rate when the city borrows money. It usually releases a new rating for the city every two or three years, she said.

“The better the bond rating is, the lower the interest rate is,” Green said. “It goes right to our bottom line.”

The ratings reflect a number of financial categories, including tax base, debt size, fund balances, unemployment, income of population and more.

One of the primary reasons for the city's improved position has been its sewer fund, for which the city has a five-year plan to balance, according to the Moody's rating. The city's financial performance has stabilized over the last fiscal year, the rating states.

“That reflects the city's progress,” Moody's Communications Strategist Thomas Lemmon said of the city's rating. “It means we think the next most likely move would be to the positive.”

Auburn City Manager Mark Palesh called the rating a “vindication” for Green, the city council and the rest of the staff who have worked together to put Auburn in a better fiscal light. When the city sells bonds and has a favorable rating, people feel confident and know what the risk is in their investment, Palesh said.

“This actually equates itself to dollars and savings for the public,” Palesh said. “It's always a goal to improve your bond rating, and I believe if we continue on, we will better our rating the next go around.”

Staff writer Christopher Caskey can be reached at 253-5311 ext. 282 or christopher.caskey@lee.net.