Standard & Poor’s (S&P) is the Credit Rating Agency that issues credit ratings for the debt of public and private corporations. Periodically, S&P reviews its credit ratings on the City’s 2006 General Obligation Bonds. Their review of the City’s bond rating raised its long-term rating and underlying rating on the City’s general obligation (GO) bonds from 'AA-' to 'AA+'.
The report highlighted the City’s strong economy, flexible budgetary policies, substantial reserves, and liquidity as significant factors in upgrading the City’s rating. The report also mentioned that the annexation of fire services and the recent salary / benefit reforms (pension and OPEB) will improve structural performance and provide operating balance to city revenues and expenses. Although S&P discounts transfers from the City’s Parking Enterprise Fund as non-operating income (a technical accounting classification) this did not prevent them from issuing a “Stable” outlook for the City’s rating, reflecting their opinion that they do not expect to lower the ratings during the two-year outlook horizon; and might even further raise the ratings if the city succeeds in further improving financial performance.
The complete report is available for viewing on the City’s web site. For more information contact the Administrative Services Director at (415) 289-4105