Standard & Poor's has announced that it is upgrading the City of Knoxville's credit rating to AA+ - the highest rating in the city's history - based on the city's strong financial performance and a stable forecast for the future.

Knoxville has reported operating surpluses during each of the past four years in addition to a steadily growing property tax base during that period.

At the same time the City has not had a property tax increase since 2004 and does not anticipate a tax increase in the near future.

"We believe Knoxville officials will sustain the city's strong financial performance and position and maintain its overall moderate debt levels," said Standard & Poor Credit Analyst Sarah Smaardyk.

Standard & Poor's is one of the major bond rating agencies and provides information used by investors.

The upgrade means that Knoxville will be able to borrow money at a lower interest rate than previously and that more investors might be interested in buying the city's bonds.

"I think this rating reflects the work the City Council and the administration have put into making certain our city is in a stable financial condition," Haslam said. "Ultimately this saves our taxpayers money in lower interest expenses and provides better access to credit lines."

Knoxville previously had an AA rating.

"This mayor, when he came into office, made a strong commitment to keep the city on a sound financial footing," said Jim York, the city's finance director, "he and the City Council have done a lot in their first five years in office and this recognizes those efforts."

In its release on Wednesday Standard & Poor's are based on the "city's significant role as a regional economic center and strong financial position."

"The ratings reflect the city's stable and expanding regional economic base anchored by the University of Tennessee; steadily expanding property tax base; strong financial management and position; and manageable capital improvement plan, coupled with annual pay-as-you-go funding of capital projects."