Spokane Mayor Mary Verner said Friday she’s confident the city will maintain its new higher bond rating despite dire 2010 budget projections.
Standard & Poor’s informed the city this week that it has upgraded the city’s bond rating to AA from AA-.
The new rating is the fifth-best ranking that the agency awards. It’s also up six steps from the BBB rating the city was given in the wake of the River Park Square financing controversy in 2001. River Park Square is owned by the Cowles Co., which also owns The Spokesman-Review.
“It’s something for this entire community to be proud of,” Verner said. “While other cities are on the verge of bankruptcy, a AA Standard and Poor’s rating indicates confidence that the Spokane city government and our economy are strong enough to warrant that kind of confidence.”
Chief Financial Officer Gavin Cooley said the change from AA- to AA could save the city about $90,000 in interest annually when the city issues about $45 million of bonds later this year as part of the 10-year property tax for streets approved by voters in 2004. The higher ranking, Cooley said, especially is attractive for investors during the current shaky economy.
City Councilwoman Nancy McLaughlin said the rating indicates that officials were right to sock away in a rainy-day fund $5 million from sales tax windfalls in 2006 and 2007. The city is using about $2 million from the fund in 2010.
The higher rating is “what we’ve been working toward ever since I have been on the council,” McLaughlin said. “Let’s just hope we can hang on to it.”
Verner said work on the 2010 budget is under way and is her administration’s top priority. A $10 million deficit is forecast next year.
“We’re not at all taking for granted our bond rating or our financial position,” she said.