Despite a summer of civic bankruptcies from Stockton to San Bernardino and increased financial scrutiny of cities statewide, the City of Long Beach had maintained good standing with one of the world’s largest bond-rating agencies.
Announced today, Standard & Poor’s assessment of the City of Long Beach’s credit rating was reaffirmed at AA-, a “strong” rating with a stable outlook. Earlier this summer, Fitch Ratings also affirmed its AA- rating for two of the city’s lease revenue bonds. Assessments such as these are used by those in the financial market to determine the City’s borrowing costs and are also indicators of a city’s financial health.
The good rating from S & P—who was recently dropped by the City of Los Angeles as its rater after L.A.’s credit rating was dropped from AAA to AA—comes as Long Beach enters into a fiscal year that saw $12.9 million cut from the general fund budget. A high credit rating in times such as these highlights the City’s ability to address the slow-growth of revenue with directed reductions while maintaining proper financial reserves.
“The stable outlook reflects Standard & Poor’s opinion that Long Beach will likely sustain its good financial performance,” the report stated, “including the maintenance of strong reserves, during a period of revenue stress.”
S & P’s report also states that the city’s good financial performance includes maintaining reserves that match about 10 percent of its recent expenditures. According to the City, $37 million in structural deficits have been eliminated over the past two years while emergency reserves have been strenthened through the use of one-time revenue sources.