By BERNADETTE GIACOMAZZO
The change in status, in a report dated Jan. 29, further confirms the strength of the city¹s finances.
The upgrade is based on continued improvement in those finances following a third consecutive operating surplus in fiscal 2007, and Moody's expectation that the city's reserves will remain healthy despite a modest deficit anticipated in fiscal 2008. The rating factors in the city's sizable tax base and its moderate debt.
³The A3 bond rating is great news for the City of Long Beach,² said City Council President Thomas R. Sofield Jr. ³It reflects on the city¹s economic health and allows for lower interest costs when borrowing funds for capital improvements and municipal services. The result will be a savings to taxpayers.²
Beginning last year, fees the city charged developers and other one-time revenues it collected were deposited in a Reserve for Bonded Indebtedness fund. As of June 30, the fund had a balance of $5.1 million, which is reserved for principal and interest payments on outstanding debt.
³This is the highest rating the city has ever been issued,² commented City Manager Charles T. Theofan, ³and with our administration¹s effective financial practices and sound budget planning, the City of Long Beach will continue to maintain a solid financial profile.²
The city¹s debt burden was characterized by Moody¹s as ³manageable.² Its debt is being retired at an above average rate, and the overall debt burden is slightly below average, at 1.9 percent. The city¹s future borrowing plans include approximately $4 million to fund firehouse renovations this summer. It is expected that the rating upgrade will save the city some $180,000 over the life of a $4.65 million bond issued Jan. 31.
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