A month-long series examining Santa Monica City Hall finances City Hall keeps bond rating high in trying times
While it may be lacking in a surplus of cash, at least City Hall has good credit.
Santa Monica is the only city in California that has a triple-A bond rating from all three of the major rating agencies.
So when officials from City Hall need money and decide to issue a bond, they can be confident investors will be interested. The triple-A rating also means low interest rates for City Hall.
This will be the third consecutive year of budget deficits within City Hall — totaling $28 million. This year, city officials must close a $4 million deficit. City Hall in 2002 faced an $8 million shortfall, and was able to cut $2.2 million in operating costs and $6.6 million in capital improvement projects. In 2003, City Hall plugged a $16 million shortfall by cutting expenses and increasing revenues. Thirty-one positions were eliminated with City Hall as part of the cuts.
But a good bond rating helps. It’s the result of prudent forecasting and conservative budgeting, said Steve Stark, the city’s finance director.
In evaluating a bond, raters look at four indicators — the city’s overall economy, its debt, financial history, and the philosophy of its management team and policy makers.
Originally published in the Santa Monica Daily Press print edition on May 10, 2004. Read the original PDF.