The three major national credit rating agencies, Fitch Rating, Moody’s Investor Service, and Standard & Poor all affirmed the City of Santa Monica’s triple-A credit ratings this week.
A credit rating of triple-A is the highest credit rating the agencies assign.
Santa Monica’s strong fiscal management, low debt levels and diverse economy, is behind the rating, according to the City.
“The affirmation of Santa Monica’s triple-A rating is a reflection of the City’s ongoing sound financial management and its commitment to controlling expenditures, as well as the community’s commitment to maintain our schools and services through the passage of Measures Y and YY,” said City Manager Rod Gould.
The City was required to seek out revised credit ratings as part of the debt financing scheme for the reconstruction of Parking Structure 6 that was approved by the City Council on Tuesday, Oct. 25, 2011.
Fitch Ratings, Moody’s Investors Service and Standard & Poor’s all affirmed Santa Monica’s ratings of AAA/Aaa/AAA on the City’s general obligation bonds in conjunction with the upcoming issuance by the Santa Monica Public Financing Authority of its Series 2011 Lease Revenue Bonds.
The Series 2011 Bonds will be issued to finance a portion of the renovation costs of Parking Structure #6 located on 2nd Street in Downtown Santa Monica and to refinance outstanding bonds of the City for debt service savings.
The Series 2011 Bonds are rated AA+ by Fitch Ratings and Standard & Poor’s and Aa1 by Moody’s Investors Service, the highest rating level assigned by the rating agencies on this type of bond.
Santa Monica’s high credit ratings save taxpayers’ money on bonding for capital projects.
In assigning it’s AA+ rating on the Series 2011 Bonds, Fitch Ratings said the rating reflects “the city’s very strong financial position, projected balanced operations and strong financial management” and “prudent actions by management to pare expenditure growth” in addition to its “vibrant retail and hospitality sectors and high income levels, in spite of recent recessionary pressures”.
Moody’s Investors Service stated that the Aa1 rating reflects Santa Monica’s “robust financial management, characterized by conservative budgeting which helps address the risks posted by the prevalence of economically sensitive taxes that comprise the city’s revenues”.