Citing Santa Monica’s strong fiscal management, low debt levels and diverse economy, the three major national credit rating agencies – Fitch Rating, Moody’s Investor Service, and Standard & Poor’s – each affirmed the city’s triple-A credit rating Oct. 26.
A credit rating of triple-A (Aaa/AAA/AAA) is the highest credit rating the agencies assign.
“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,” City Manager Rod Gould stated.
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 Oct. 25.
Fitch Ratings, Moody’s Investors Service and Standard & Poor’s all affirmed Santa Monica’s triple-A rating 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, city officials said.
The Series 2011 bonds will be issued to finance a portion of the renovation costs of Parking Structure 6, located on Second Street in downtown, and to refinance outstanding bonds of the city for debt service savings, city officials said.
Fitch Ratings and Standard & Poor’s rate the Series 2011 bonds AA+ and Aa1 by Moody’s Investors Service, the highest rating level assigned by the rating agencies on this type of bond. The city’s high credit ratings save taxpayers’ money on bonding for capital projects, officials noted.
In assigning its 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.”
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.”