Fitch Ratings, one of the three major credit rating agencies, agrees with Coral Springs’ view that its finances are in excellent shape.
The agency recently affirmed the city’s AAA credit rating, the highest bond rating an organization can earn, with a stable outlook for its General Obligation bonds. The agency had given the city the same rating two years ago as well. According to Fitch, the city’s “financial operations and reserve levels remain sound despite economic pressure that led to reserve draws in prior years.”
The city’s financial reserves, economic stabilization measures, strong debt service margin, and maintenance of stable financial and debt position were among the factors that influenced the decision. The credit rating will help the city save money in interest and credit enhancements, such as bond insurance.
The city had, for many years, enjoyed a triple-A bond rating from all three agencies — Moody’s Investors Service, Standard and Poor’s Rating Service, and Fitch Ratings. The city currently has a AAA-credit rating from Standard and Poor’s as well, but Moody’s downgraded the city to AA1, the second highest rating, in February 2014. Moody’s decision came as a surprise for officials and staff, as the city’s finances were on the upward curve then.
“The revised rating by Moody’s was due to a change in methodology,” said City Manager Erdal Donmez. “Aa1 is still a great rating; most private or public companies would love to have such a rating. For all practical purposes, having AAA rating from two agencies is all that you need.”
Donmez is hopeful that the city will soon get back to having a AAA rating by all three agencies. “The city’s fiscal and economic conditions have improved since 2104,” he said. “All we can do is present the facts and figures, and hope for the best. We believe we are in very good shape; it is very gratifying that we have reaffirmation from Fitch Ratings.”
“We’re proud to have Wall Street once again acknowledge the city’s commitment to long-range planning,” Mayor Skip Campbell said in a press release. “This credit rating confirms our stable financial position, and that has a tremendous fiscal impact for our residents.”
The triple-A rating from Fitch Ratings comes at a time when the city is toying with the idea of another public safety bond issue. The City Commission is expected to vote on the matter at its meeting this week.