City’s Financial Condition Praised

Ratings Firm Lauds San Diego’s Strong Fiscal Discipline, Pension Reserve in Ratings Update

Wednesday, February 3, 2016 - NEWS RELEASE

 

San Diego – In re-affirming the City’s credit ratings today, Moody’s Investors Service praised the City’s strong fiscal discipline, diverse economy and new pension reserve while predicting a stable outlook for future revenue growth.
 
“This is another sign that we’re keeping San Diego’s finances on track,” said Mayor Kevin L. Faulconer. “We’re building our better future by staying fiscally responsible so we’re in the best possible position to maintain the investments we’ve made to neighborhood services in recent years.”
 
Calling the City’s financial management “strong and effective,” Moody’s – one of the country’s leading credit-rating firms – affirmed the City’s Aa2 issuer rating and A1 lease revenue bond ratings. Higher ratings lead to lower costs for taxpayers when the City finances neighborhood improvements, such as street repairs and constructing new libraries and fire stations. 
 
Moody’s also lauded Mayor Faulconer’s creation of a pension reserve, which the City Council recently adopted. The new pension reserve fund will act as a safety net for the General Fund budget when pension costs go up in years that investment returns are lackluster.
 
“The city’s formal decision to establish a Pension Payment Stabilization Reserve sets it apart from its peers,” Moody’s said. “The city’s strong financial management will likely ensure stable reserves and operations going forward.”
 
Moody’s said its Aa2 rating reflects the City’s large and diverse economy which continues to demonstrate strong growth trends in key economic indicators. The report also cited the City’s strong and improving financial position marked by growing reserve and policy targets.