City lands in lofty spot in credit rating
Lake Oswego is now the only municipality in the Northwest to hold the highest credit ratings from two firms that review finances for organizations worldwide.
The news that Lake Oswego received Triple-A ratings from both companies puts it among an exclusive handful of communities in the western United States with top ratings from both the companies, Standard and Poor's and Moody's.
Standard and Poor's and Moody's are the top two firms that review the finances and financial management practices of companies and organizations worldwide. The agencies periodically update credit ratings and with this most recent renewal, they focused on the Lake Oswego's financial management, investments, current and future debt levels, and debt management policies and procedures.
Much like an individual's credit rating, a high bond rating is an indication and affirmation of solid fiscal management and accountability.
'These premier ratings are a testament not only to the financial health of Lake Oswego, but to how the city's finances are managed. The wealth of a community is an important factor in assessing municipal credit, but wealth alone is not sufficient to earn the highest ratings,' said Chip Pierce, a partner with Western Financial Group, LLC. 'These agencies issue their highest ratings very judiciously-only 2.5 percent of all cities rated by Moody's earn the Aaa rating.'
Having a good rating pays dividends in the form of lower interest rates on borrowed money. In the past, the city's positive rating has allowed refinancing of debt at favorable rates that have saved taxpayers money.
'Our new credit ratings will reduce interest costs on our existing debt issues, and enable us to obtain the lowest possible interest rates on future bond issues,' says Richard Seals, finance director for the city of Lake Oswego.
'Lower interest rates translate into the lowest possible property tax rates,' Seals said.
Achieving a top rating is increasingly rare in the economic times of today, considering the unfunded pension liability issues of General Motors and the city of San Diego, as well as the downgrading of Ford's credit rating.
For more information about the upgraded ratings, visit www.standardandpoors.com or www.moodys.com. If you have questions about city finances, call Seals at 503-675-3746.