Standard & Poor’s Ratings Services raised its issuer credit rating on the City of Roseville one notch to ‘AA+’ from ‘AA’ in its latest review published April 1. The upgrade is based on Roseville’s strong economy, strong budget flexibility and strong budget management according to Standard & Poor’s.
This credit rating upgrade has the potential to save the City hundreds of thousands of dollars with future bond issuances. The debt service savings to the City on the issuance of $35 million in bonds would be $500,000.
“The credit rating upgrade is the result of sound financial policies enacted by our City Council and reflects the hard work we’ve done over the past decade,” said Roseville Finance Director Monty Hanks.
“In our opinion, Roseville’s debt and contingent liability profile is strong with a total-governmental-funds-debt-service ratio of 1.4% of total governmental funds expenditures. We also believe Roseville’s very strong economy and participation in the broad and diverse Sacramento-Roseville-Arden-Arcade metropolitan statistical area provide additional rating stability,” said Standard & Poor’s credit analyst Daniel Zuccarello. “Therefore, we do not expect to change the rating over the two-year outlook period.”
“We, however, could lower the rating if Roseville’s budgetary performance were to weaken significantly, resulting in reduced financial flexibility or liquidity. Conversely, we could raise the rating if budgetary performance were to improve consistently, providing additional comfort that financial operations and reserves will likely remain at levels we consider very strong,” said Zuccarello.