|Standard & Poor’s Ratings Services has raised the City of Chula Vista’s credit rating to AA- (the City previously had an A rating). According to S&P’s rationale for the AA- rating “reflects our view of the city's strong budgetary flexibility and projections of improvements in fiscal years 2013 and 2014. Further strengthening the ratings are our view of the city's strong economy.”
Other factors cited in awarding the AA- rating include:
• City of Chula Vista participation in San Diego area’s broad economic base
• The City’s per capita effective buying income at 89.6% of the U.S. and per capita market value of $87,427
• The City’s budgetary flexibility remains strong, with reserves between 10% and 15% for the past several years and no plans to spend them down
• The City’s financial liquidity is very strong, and
the City's management conditions are viewed as strong with good financial practices.
“We are proud to announce a second ratings upgrade this calendar year,” said Finance Director/Treasurer Maria Kachadoorian. “Our local economy is strong, we have a balanced budget and we are building our reserves.”
The City of Chula Vista was one of the first cities to feel the severe impacts of the recession in 2006. What followed were hundreds of foreclosed properties, severe drops in property and sales tax revenues, significant municipal budget deficits, and a 26 percent reduction in City staffing. The City of Chula Vista weathered this financial storm by taking bold, proactive actions.
Real pension reform, a leaner workforce, and efficiency measures have improved the budget outlook. These actions were critical to the City improving its credit rating with S&P. With the economy improving, sales tax revenues increasing, and the housing market recovering, Chula Vista is cautiously optimistic about a better financial future.
Standard & Poor’s credit ratings express the agency’s opinion about the ability and willingness of an issuer, such as a corporation or state or city government, to meet its financial obligations in full and on time.
Posted: November 13, 2013