Two debt rating agencies — Moody’s and Fitch — have reaffirmed Evanston’s triple-A credit rating.
The ratings re-examination came in connection with the city’s plan to issue $19.2 million in new general obligation bonds today. The triple-A rating is the highest available.
Moody’s said the city’s “affluent and diverse tax base” from an economy based around Northwestern University and two major hospitals
Both rating agencies noted the city’s affluent population and strong higher-education and health care jobs base as reasons for confidence about the city’s ability to repay the debt.
But they noted the city’s underfunded police and fire pension plans and reliance on economically sensitive revenue sources including sales taxes and shared state income tax revenue as challenges.
Fitch said the city’s “overall debt ratios are manageable at $4,030 per capita.”
It said the city has an above average level of debt, but has been paying it off at a rapid rate.
Both agencies noted favorably the city’s efforts to trim spending to deal declining revenue levels during the recession.
Assistant City Manager Martin Lyons said the high credit rating saves the city money by letting it borrow at the lowest possible interest rates.
At Monday’s City Council meeting Lyons said that despite some performance variations in individual funds, the city ended its 2010-11 fiscal year with revenues and expenditures close to budget targets.
He said that after three months of the current transitional 10-month budget year, it’s still early to tell, but that so far it appears that current-year revenue and expenditures are also running in line with the budget.
Related documents
Moody’s rating report
FitchRatings report
Same people that rated junk mortgages as AAA
Some how their rating does not inspire much confidence given what we really know about how the city pours through money and the way the rating agencies rated junk mortgage bonds as AAA that allowed them to be securitised and sold—-and you know what happened to the market and the economy.