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Credit Agencies Confirm High Rating for SJ

San José, California – Moody's re-affirmed a credit rating of Aa1 for the City of San José last week, following a reaffirmation earlier this month by both Standard and Poor's and Fitch of an AA+ rating. Recent confirmation from these agencies give San José the highest rating in the state for large cities. According to Standard & Poors, this rating “reflects the city's strong financial position and the diversity within the high-technology sector of the surrounding economic base.”

“The confirmation of San José’s financial strength is especially important as the state experiences an economic slowdown that could have an impact on cities throughout California,” said Mayor Gonzales. “This excellent credit rating is a tribute to our City’s good financial planning and management, and it will help us continue to provide great services to the people who live in San José.” Unlike the State of California whose credit rating was downgraded two notches last month due to the deepening energy crisis, these high marks for San José “reflect strong financial performance and excellent management policies,” stated officials from Fitch. “ All three rating agencies have now reaffirmed the City's "implied" rating received this past March. The $71 million GO bond series 2001 are scheduled to sell on May 23, 2001.

The new credit ratings will save taxpayers an estimated $6.8 million in financing costs for the two general obligation bonds passed in the November 2000 election for library and parks improvements. Additionally, the high credit rating will have a positive impact on City finances for future projects because the City will be able to borrow at a lower interest rate.

It is significant that all three agencies issued San José an equivalent rating “across the board,” indicating that all three have a high regard for San José’s prudent money management and long term financial strategies.

“These ratings reflect San José’s sound financial operations and conservative fiscal management philosophy,” says City Manager Del Borgsdorf. “Our approach is to spend conservatively and increase our financial reserves so that we are well-prepared for economic uncertainty.”

The City of San José was also recently presented with the “Excellence in Operational Budgeting” award for 2000-2001 by the California Society of Municipal Finance Officers. This award recognizes the achievement of excellence in operational budgeting and reflects an outstanding budget document and underlying budgeting process through which the budget is implemented.

Additionally, for the 12th straight year, the City has received a Certificate of Achievement for Excellence in Financial Reporting from the Government Finance Officers Association (GFOA), and for the ninth consecutive year, the City received the Distinguished Budget Preparation Award from GFOA. For the 11th time, the City received the Award for Outstanding Financial Reporting from the California Society of Municipal Finance Officers (CSMFO).

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