(ST. LOUIS – May 11, 2018) Fitch has reaffirmed the City of St. Louis’ Issuer Default Rating (IDR) at ‘A−’ and revised its outlook to negative. Fitch also reaffirmed the city’s lease revenue bonds issued through the St. Louis Municipal Finance Corporation at ‘BBB+’.
Although Fitch is holding the city’s rating steady, the change in outlook to negative reflects many of the same concerns raised by other rating agencies, said Comptroller Darlene Green.
“The City of St. Louis’ ‘A’ category rating is welcome, and Fitch praised our ability to control costs and manage pension fund liability,” said Comptroller Green. “At the same time, Fitch raised concerns about our low reserves and limited revenue growth opportunities.”
According to Fitch, pressures limiting the city’s revenue growth include recent policy initiatives that use tax incentives to spur development and revitalization of properties—creating a significant time lag before the projects generate new revenue for the city.
“Last week’s announcement from Moody’s has brought about a much-needed public conversation about the city’s fiscal health,” said Comptroller Green. “Our decision to dedicate 1.5 percent of annual payroll to rebuild reserves beginning with the 2019 budget is a step in the right direction. My office stands ready to work with other city leaders as a team to find new, creative ways to spur development, gain near-term revenue and protect the city’s credit.”
Comptroller Darlene Green is the chief fiscal officer of the City of St. Louis and is charged with safeguarding the city’s credit rating and with protecting taxpayer dollars. Visit www.stlouis-mo.gov/comptroller to learn more about the Office of the Comptroller.
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