Norwich — The city retained its favorable AA bond rating this week by Standard & Poor’s rating service, which gave the city a stable outlook, citing its strong financial management amid a poor local economy. 

The rating agency noted Norwich has “strong management, with good financial policies and practices” in its Feb. 8 rating in advance of a planned Feb. 17 bond sale for $8.8 million in approved natural gas line extensions and city and school facilities improvements.

City Comptroller Josh Pothier said he was pleased with the ranking, saying it is the best rating the city could expect given current conditions.

In its seven-page report, Standard & Poor’s called the city’s debt of 3.6 percent of the annual budget “strong” and said the city also has a “strong budgetary flexibility” with a fund balance at 8.4 percent of total operating expenses.

The agency noted a slight budget deficit at the end of the last fiscal year, along with a projected budget surplus this year of $1.5 million.

The report said the city’s deferral of a portion of pension funding weakened its view of the city’s budget outlook.

Pothier said the city plans to increase pension contributions by 15 percent per year until the contributions reach 100 percent of the calculated employer contribution.