Moody’s Affirms Palmdale’s Grade A Bond Rating

Moody Palmdale bond ratingPALMDALE – Moody’s Investors Services has affirmed the City of Palmdale’s Aa3 general obligation (GO) equivalent long-term issuer rating and the A3 rating on its certificates of participation (COPs, Series 2002 and 2012).

“This proves once again that the responsible approach we’ve been taking in managing the City’s finances, especially during the tough economy of the past few years, is paying huge dividends,” said Palmdale Mayor Jim Ledford. “Many cities across this state and country would love to have bond ratings like ours. Furthermore, this sends a message to potential new investors and businesses that Palmdale is a place of stability where they can come and grow. Kudos to our City staff for their outstanding stewardship of the taxpayer’s money.”

According to Moody’s, “the affirmation reflects the city’s strong financial management practices, which have enabled it to maintain a sizeable and liquid reserve position despite pressures from significant tax base declines and the dissolution of the city’s redevelopment agency (RDA).

The report further stated, “The key factors driving the affirmation are the City’s sizable fund balance reserves and strong management team, which has ably and conservatively maintained City finances in the face of considerable stress. After a $2.3 million operating deficit in fiscal 2012, the city finished the year with a considerable $29.7 million fund balance (57.2% of general fund revenues), with $16.4 million (31.6% of general fund revenues) unreserved. In addition, the general fund cash position provides the city with ample liquidity at 54.8% of revenues. The California median fund balance for Aa3-rated cities is 29.6% of general fund revenues, underlying the comparative strength of the city’s reserves versus those of its peers.”

“Our Mayor and Council have provided us with excellent direction as we continue to deal with many financial obstacles such as a soft economy and the State of California’s dissolution of redevelopment,” said City Manager Dave Childs. “I am extremely proud of our finance team for their expertise, diligence and forward thinking approach as we move forward in building a strong future for Palmdale.”

(Information via press release from the city of Palmdale.)