Key Rating Factors

Credit context and assumption

Base-case expectations

We expect institutions and the economy will remain supportive.

  • • We expect Windsor's operating balance will decline in 2020 due to the impact of the global COVID-19 pandemic on the city's economy.

  • • Strong and prudent financial management will allow the city to continue with its capital expenditure plans while avoiding an undue buildup of debt.

  • • Very predictable and well-balanced local and regional government framework supports the rating.

Sound budgetary performance will continue to assist in maintaining minimal debt.

  • • We expect Windsor will experience budgetary stress in 2020 due to the COVID-19 pandemic but that the city will continue to maintain its large operating surpluses from 2021 onward.

  • • We expect the city's track record of stable fiscal performance will continue, allowing it to proceed with its capital agenda while maintaining robust liquidity and holding its tax-supported debt well below 30% of operating revenues.

  • • A healthy level of liquidity will continue to support creditworthiness.

Outlook

The stable outlook reflects our expectations that, in the next two years, Windsor's prudent and forward-looking financial management practices will support the city's strong budgetary results. We also expect the city will maintain a robust liquidity position as it continues to pay down its tax-supported debt burden.

Downside scenario

Although we view it as unlikely in the next two years, deterioration in budgetary results, such that after-capital deficits average more than 5% of total revenues on a sustained basis, leading to reduced internal resources and increased reliance on debt funding for capital bringing the debt burden closer to 30% of operating revenues, could result in a negative rating action.

Upside scenario

We could raise the rating in the next two years if the management team continues to take the necessary revenue measures to meet the city's funding needs, paired with a reduction in concentration of the economy.