Oakland’s ratings are at their highest in City’s history; second-highest rating available; analysts call out the City’s strong financial position, good fiscal policies and practices, and “experienced, prudent management team”
The Moody’s upgrade recognizes the City’s strengthened fiscal position and robust financial policies, participation in the strong Bay Area economy, and prudent management. The analysis noted: “The city’s current, very strong fiscal position, combined with strengthened fiscal policies and experienced, prudent management, have positioned the city well for its clear fiscal and social challenges, including increasing pension costs, sharply increased homelessness and declining housing affordability.”
Looking ahead, Moody’s stated, “We expect that the city will maintain its strong financial position given management’s commitment to strategic, long-term financial planning that is supported by prudent fiscal policies.” They also positively note that “nearly 80% of all outstanding debt will retire within the next 10 years.”
“I’m grateful the rating agencies have recognized Oakland’s improved commitment to prudent financial policies and sound fiscal management,” said Oakland Mayor Libby Schaaf. “Since the Great Recession, this Administration and the City Council have continued to invest in critical services—like homelessness and illegal dumping—while more aggressively addressing our long-term financial health. Our recent acts like establishing a “vital services rainy day fund,” paying down unfunded liabilities, and addressing our deferred maintenance backlog via initiatives like the Great Pave will save the city money today, and ensure future generations inherit a stronger and more stable city government.”
City Administrator Sabrina Landreth expressed appreciation for Oakland’s public safety employee unions—the Oakland Police Officers Association, the International Association of Firefighters (Local 55)—who partnered with the Administration last year to address Oakland’s long-term financial stability by agreeing to place caps on the amount the City contributes for retiree health care benefits. These retiree medical caps represent significant relief to the City in beginning to address the growing and unfunded liabilities associated with providing health care to employees after they retire. These reforms will reduce the unfunded liability by $175 million in the near term and are projected to save $391 million within the next 15 years.
“This rating increase shows that our partnership with Oakland’s police and firefighters, along with our civilian unions—the International Brotherhood of Electrical Workers (IBEW) Local 1245 and the Confidential Management Employees Association (CMEA), Service Employees International Union (SEIU), Local 1021, and International Federation of Professional and Technical Engineers (IFPTE), Local 21—has allowed us to bolster the City’s long-term financial outlook and preserve the services our Oakland community needs,” said Ms. Landreth.
The upgrades will allow the City to sell its bonds to investors at lower interest rates, thereby reducing the cost of financing capital improvements over time and decreasing the property tax levy required to support the bonds.
Based on press release from City of Oakland, sent to Zennie62Media, Inc.