Fitch Group, one of the nation’s top three credit rating agencies, affirmed an AA- rating of Gilroy’s library bonds this Wednesday, pointing to the city’s solid financial position.
The rating took into account the entire financial condition of the city, including its general fund balance, conservative fund balance reserve policies and active management to align expenses with revenues, said City Administrator Tom Haglund.
In May 2009, the city took $10.5 million in bonds to finance the acquisition, construction the new library facilities. In 2009, Fitch Group gave those bonds an A+ ratings, said Christina Turner, Gilroy’s finance director. After the summer 2010 issuance of the second series of bonds of $23.5 million, Fitch Ratings upgraded the bonds to AA-.
According to Fitch Group’s website, an AA- rating means an obligor has a very strong capacity to meet its financial commitments.
“Being stable is a good thing,” Haglund said.
“I think this positively reflects the strong management we’ve exhibited especially since the recession began in 2008. We are one of the first cities to comprehensively address the recession’s effect on finances in the state,” he said.
Haglund said one of the things that impressed Fitch Group was Gilroy’s balanced budget for 2013.
“We’ve done a remarkable job, both Council and staff, ensuring we have a stable budget in place,” he said.