FOR IMMEDIATE RELEASE
March 11, 2009
Contact: Dana Woodson - 757.393.8641
PORTSMOUTH RETAINS ‘AA-’ RATING FROM FITCH RATINGS
Portsmouth, VA – (March 11, 2009) -- A news release from Fitch Ratings to the City of Portsmouth states that the rating agency has assigned an ‘AA-’ rating to the City of Portsmouth’s approximately $37.3 million general obligation bonds. The bonds are scheduled to sell via negotiation on March 17, 2009. Fitch affirms the ‘AA-’ rating on approximately $296 million in outstanding general obligation bonds. The Rating Outlook is ‘Stable’.
The news release stated that the ‘AA-’ rating is based on the city’s plans to restore structural balance to the general fund budget and increase reserves to policy levels while continuing to diminish internal service fund deficits. Maintenance of the current rating is dependent upon the city meeting its stated goals of sustaining and eventually increasing its reserves, adopting structurally balanced budgets that encompass conservative revenue forecasting, and lessening or eliminating its internal service fund deficits.
The city identified early in FY 2009 potential revenue shortfalls and went to great lengths to offset them. “We implemented several cost-saving measures within city government including continuing a hiring freeze and enacting a travel moratorium, two unpaid holidays, and five furlough days for city employees. “These were tough choices that we had to make and the results are reflected in our positive rating from Fitch,” stated Chief Financial Officer Betty Burrell.
The rating analyst recognized that the Portsmouth City Council had the ability to make difficult decisions during extremely difficult economic times. City Council has been focused on preserving the undesignated fund balance and has an aggressive plan to restore it to 15% of revenues from its current 12% status.
“This bond rating directly benefits the citizens of Portsmouth. By retaining our ‘AA-’ rating, our interest costs are contained and we will not see a penalty that could have happened if our rating was lowered. This rating and ‘Stable Outlook’ strengthens our opportunities to sell our bonds at a lower interest rate which directly benefits our citizens and our business community,” added Ms. Burrell.
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