Comptroller Green Responds to Credit Rating downgrade
Moody has affirmed the City of St. Louis with a Stable Outlook
This article is 10 years old. It was published on August 18, 2015.
Last week Moody's credit rating agency downgraded St.
Louis' GO and lease revenue debt by one notch. St. Louis' GO debt is down to A1 from Aa3 and lease revenue debt ratings to A2 from A1 for essential purposes and to A3 from
A2 for nonessential purposes. The city retained its stable outlook.
The move to lower the bond rating by one notch is due in part to the rating agency's revised
rating methodology. In addition, the city's high debt profile, low liquidity and reserve levels,
and socioeconomic indices are factors as well. The city continues to manage these
financial challenges in a fiscally responsible and prudent manner with strong financial
management practices such as conservative budgeting. The city has taken steps to
increase revenues and decrease expenditures in order to strengthen its profile and
increase reserves.
Despite the downgrade, Moody's gives the city high marks for strong financial management
practices, reductions in personnel and discretionary spending and revenue reallocations.
The city's year-end surplus of $2.3 million signals a return to a positive growth trend, aiding
the city's effort to increase reserve fund balances and ease liquidity.
The city believes that the earnings tax will pass again next year, since voters
overwhelmingly approved it in 2011 by a margin of almost 9-to-1. The city has been
proactive about planning for the future. The Comptroller's Office commissioned a 10-year
long range plan that is meant to help ensure structural balance so that recurring revenues
meet recurring expenditures and the city is able to meet its reserve targets and improve
liquidity.
The city has a large and diverse tax base that has stabilized over the years. The private sector continues to provide a trend of strong economic development in the city with several large developments currently underway. The City of St. Louis continues to act as a regional hub in the Midwest for the healthcare, higher education, manufacturing and finance sectors—according to Moody's.
In closing, the city is continuing to be managed prudently, is recovering financially and features vibrant economic growth.
-
Department:
Office of the Comptroller
-
Topic:
Local Economy
Most Read News
- City of St. Louis Launching Emergency Rental Assistance Program The City of St. Louis announced today that the application process for emergency rental assistance opens to St. Louis residents on December 3 and closes December 16.
- New Data Show St. Louis City Continues To See Decrease in Homicides and Other Crime Newly released crime data for August 2024 shows that the City of St. Louis continues to successfully decrease the amount of crime, including homicides, occurring in the City.
- St. Louis Planning Commission Adopts New Land Use Plan to Restore Urban Qualities Like Walkability and Mixed-Use Neighborhoods The City’s Strategic Land Use Plan (SLUP) serves as the guiding legal document for land use policy in St. Louis.