All three credit rating agencies – Standard & Poor’s, Fitch and Moody’s – have affirmed the city of Seattle’s existing Aaa/Aa1 bond ratings. In addition, Standard & Poor’s has revised its outlook for Seattle’s rating to “stable” from “negative.”bio
Steps Seattle has taken to address financial and economic challenges factored into the affirmed ratings. According to S&P, “The ‘AAA’ rating reflects our view of the city’s:
- economic role as the center of a very deep and dynamic regional economy;
- strong income indicators and a resilient employment market that has kept the city’s unemployment rate below the national average;
- strong financial management policies and practices, including robust forecasting and monitoring capabilities; and
- low-to-moderate debt burden, with rapid amortization and excellent management of the city’s longer-term capital improvement plan.”
In addition, S&P revised Seattle’s outlook to “stable” based on steps the city took last year to fund its pension system.
“Our strong credit rating reduces the cost of borrowing for essential infrastructure improvements and saves taxpayers money,” said Mayor Mike McGinn. “Last year, with the Council’s help, we built up our Rainy Day Fund, a tangible demonstration of our commitment to a financially prudent city budget. I look forward to working with the Council as we work to close our budget shortfall and provide long-term financial stability for the City.”
“The excellent ratings validate our actions over the past several years to maintain a solid financial foundation,” said Councilmember Tim Burgess, chair of the Council’s Government Performance and Finance Committee. “Despite the sluggish economy and significant budget cuts, the Council and Mayor, along with the Retirement Board of Administration and city employees, worked together to keep our fiscal house in order. The excellent bond ratings strongly affirm the course we have followed.”
The city has taken a number of steps to improve its financial position. The Mayor, working with the Council, developed a budget plan for 2011 and 2012 that closed significant General Fund budget gaps. In both cases this was done without raising general taxes. In addition, the city adopted policies to increase its Rainy Day Fund. The city also adopted a plan to address challenges to the city pension system. City officials are now studying additional changes to the pension system to ensure long-term sustainability.