ORANGE BEACH, Ala. — Amidst what seems to be nothing but an economic nightmare, Orange Beach received promising news about its work to improve the city’s financial situation.

Nationally recognized rating agency Standard & Poor’s upgraded Orange Beach from an A to an A+ rating due to a planned bond refinancing.

The rating could lead to “lower interest rates and better treatment for the city’s debt obligation in the public marketplace,” City Administrator Ken Grimes said in a news release.

Standard & Poor’s cited the city’s “strong financial position, including a permanent reserve fund” as one of the reasons for the upgrade.

Moody’s, a second rating agency, reaffirmed the city’s Aa3 rating. The agency cited the city’s “prudent fiscal management and conservative budgeting” for the confirmation.

Orange Beach is one of the few city’s that maintained its previous rating and was upgraded.

“During these tough economic times, these ratings bring great news to the city and our region,” Mayor Tony Kennon said. “Our efforts in cutting budgets to meet conservative revenue projections as well as good fiscal policies to build reserve funds by $2 million this fiscal year appear to be the reasons for these positive ratings for the city of Orange Beach.”

The city council is currently working to refinance six bond issues by combining them, saving the city nearly $500,000. Merchant Capital is the underwriter for the city’s bond issues.

“This news is significant and speaks well for Orange Beach at a critical time,” said Kenneth C. Funderburk, executive vice president of Merchant Capital. “Potential bond buyers should be energized by this news.”

The city has worked diligently to create a tight operational budget in an effort to rebuild a damaged financial situation. The operational budget for the year sits at a considerably lean $21.7 million, more than a 21 percent reduction. Expected revenue is $24 million and, as Kennon has said on numerous occasions, the city is set up to show a $2 million surplus in 2009. Kennon commented earlier in the year that some excess money would be set aside for a rainy day fund.

All of the financial footwork has contributed to the received ratings