City’s credit rating improves for second consecutive year
Credit rating agency Standard & Poor’s recently notified the City it has raised Redlands’ long-term and underlying rating from AA to AA+ on the City’s series 2007 pension obligation bonds. The new rating is one step below S&P’s highest rating of AAA.
“The raised rating reflects our view that the city will continue its record of strong-to-very-strong financial performance,” the company wrote in its Nov. 16 ratings summary.
“I’m elated by the announcement from Standard & Poor’s,” said Redlands City Manager Charles M. Duggan, Jr. “It is a great reinforcement that the City Council and City management are being fiscally responsible.”
The Standard & Poor’s summary cited “good management, with financial policies and practices that we view as good, including realistic budget assumptions; budget-to-actual reports provided to the council monthly; six-year general fund financial forecast” along with “a formal minimum reserve policy of 12% of expenditures, along with pledging to commit 60% of positive operating results to various reserves; and a strong institutional framework.”
The report also noted the City’s “strengthening tax base continues to be supported by a strong housing market along with multi-use and transit-oriented residential and commercial developments.”
The recent bond rating increase follows an increase in September 2022 from AA- to AA. Previous ratings increases occurred in 2018, 2014 and 2009.
Standard & Poor’s is one of the largest credit rating agencies, assigning letter grades to companies and countries and the debt they issue on a scale of AAA to D, indicating their degree of investment risk.