Fitch Ratings this week reaffirmed its AA+ ratings on two Newport Beach bonds used to finance the Civic Center project.
Fitch, along with the Moody’s rating agency, is reevaluating California cities’ debt in the wake of the bankruptcies of Stockton and San Bernardino, said City Manager Dave Kiff.
“I was happy to see Fitch’s rating,” Kiff said.
“The city’s financial performance has been strong resulting in very high reserves, even after a large planned general fund balance transfer to a new capital projects fund,” Fitch wrote in its report Tuesday. “Management has proven successful in expenditure savings including labor salary and pension concessions and Fitch expects the city will maintain strong financial performance and very high reserve levels.”
Kiff said he was gratified at the Fitch report recognized that the city “taken some proactive but not panicked steps to address the fiscal crisis of 2009. We did so in a way that didn’t use reserves, didn’t compromise critical services, and didn’t impact many employees through layoffs, but did have a material positive impact on our long-term fiscal condition.”
“We are not out of the woods yet, but we know the right path through it,” he added, citing the city’s renegotiation of employee pension plans as a key.
“A few years ago, employees paid nothing towards their pensions,” Kiff said. “Within the current labor agreements, they’ll pay around $6.6 million a year. That’s a huge jump.”
It is good to see after building a useless Taj Mahal
That we may have dodged the bullit and our credit rating may not fall
A total money waste we never should have spent
How we ever found the money lent?
Every citizen of Newport Beach should be given an axe
We are not out of the pension woods, cost cutting cannot relax
Even with all our boats in the harbor, we may not sail away
Pension bankruptcies we may defer but not forever delay