Fitch Ratings has upgraded San Luis Obispo County’s general-obligation bonds to AAA, the highest grade it offers, from AA+.
“Because of the pay and pension reform implemented by the Board of Supervisors and a more robust budgetary process, we are emerging from the recession in a stronger fiscal condition than when we entered it,” County Administrative Officer Dan Buckshi said in a statement.
The county’s pension obligation bonds series 2003A, 2003C, 2009A, general obligation ratings and lease revenue refunding bonds series 2012A were upgraded from AA to AA+.
“An upgrade at the end of an economic downturn is quite an accomplishment. It is a reflection of our conservative fiscal policies and the strong working relationship between the Board of Supervisors, the county administrative officer, my office, and all county employees,” Jim Erb, SLO county’s auditor-controller-treasurer-tax collector said in a statement.
The county’s Treasury pool also recently had its AAA/V1 rating, the highest grade, affirmed.
Fitch said SLO County’s strong financial performance event through the recession, coupled with strong liquidity, low debt and a stable local economy and tax base were key factors in the upgrades. In 2007, SLO County set a five-year plan to “address expected budgetary pressures that was later extended to seven years due to the longer than expected economic recovery,” Fitch said.
Fitch noted that the county has worked to close budget gaps over the last six years and expects to break even or notch a small surplus in its 2013-14 fiscal year.
“[F]or fiscal 2015, a status quo budget including no revenue growth would result in a $5.5 million surplus compared with a targeted breakeven,” Fitch said. “Further, [the county's] management has not included in its projections $22 million in one-time sales tax payments expected to be received over the next two years during construction of two large-scale commercial solar projects. Management plans to use these funds for reserves.”