The city of Paso Robles saved well during the recession but could benefit from diversifying its local industries now centered on tourism, according to a report released this month by bond rating firm Fitch Ratings.
The company affirmed the city’s ‘AA’ bond rating in its report, saying the city has a stable outlook ahead. Such a bond rating means that the city pays lower interest rates when it borrows money to pay for a large public project, decreasing the burden on taxpayers.
“They liked everything the city was doing,” said Jim Throop, city administrative services director. “But (they) said it would be better to try and expand even more in the commercial/industrial sectors.”
Overall, the city’s finances have benefited from its “conservative budgeting, proactive financial planning, active expenditure management and the recent adoption by voters of a temporary half-(per)cent sales tax,” the report says.
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The city cut recession-era costs by eliminating discretionary spending such as extra maintenance and reducing staffing by 35 percent through a hiring freeze and retirement incentives.
Today, such actions mean rosy projections to the city’s general fund balance this fiscal year to a “very strong” $17.1 million, according to the report. That’s up from $10.7 million in fiscal year 2011.
However, the city didn’t get upgraded to the rating firm’s highest standard – an ‘AAA’ score – because of its “limited local economy,” according to the report.
The analysis indicates that the city’s wealth is largely centered on wine production and tourism and less so on higher-paying software engineering and biotechnology industries. The firm acknowledged that such firms have a growing presence in the area.