Fitch Ratings affirmed earlier this month the AAA rating for the City of Menlo Park’s general obligation bonds and provided a stable ratings outlook. The outcome of the Fitch review, which focused on the City’s 2009 “Measure T” recreation bonds, was the optimal result of a ratings review.
The affirmation of the rating focused on a number of key drivers, some of which were based on the local and regional economy and some of which were focused on financial decisions made by the City that have enhanced its financial positions.
Specifically, Fitch cited the following reasons for the affirmation of the AAA rating and the stable outlook:
- The presence of a strong technology industry with increasing employment levels and a growing tax base;
- Unemployment rates well below the state and national averages;
- Strong city financial operations, including extremely healthy unrestricted General Fund reserves;
- Exceptional revenue flexibility for a California city;
- Prudent financial management to minimize borrowing and reduce long-term liabilities, including fully funding the retiree medical liability and paying off the side fund for public safety employees; and
- Manageable long-term obligations due to an low direct debt burden.
Fitch Ratings is a leading provider of credit ratings, commentary and research. Reviews of the City’s debt by the major ratings agencies occur on a regular basis, and the independent nature of the review provides a good confirmation from an outside source about the City’s overall fiscal health.