With its strong financial practices, budget performance and stable economy, the city of Paso Robles has received a AAA bond rating from the credit-rating agency Standard & Poor’s.
It’s the first time the city has been upgraded from AA to AAA, the highest rating assigned by the financial services company. Although the city has no plans to issue more bonds to fund capital projects, an excellent credit rating means that it might receive a lower interest rate if it issued bonds in the future, said Jim Throop, the city’s director of administrative services.
“We’ve hit the top,” Throop said. In assigning the AAA rating, the agency reviewed the city’s financial policies and management style, and determined that “everything we’ve been doing has worked well.”
Throop added that the city’s budgetary flexibility was deemed to be very strong as well as its liquidity.
“If something happens to the economy, we would be able to manage our way through it versus, ‘Oh, what do we do?’” he said. “We have sales tax, TOT (hotel bed tax), and property tax different ways to manage the budget.”
Standard and Poor’s found Paso Robles’ economy to be “adequate, with a projected per capita buying income of 91 percent of the U.S. and per capita market value of $123,000.” Moreover, the agency also took into account the diversity of the regional economy and the county’s 8.1 percent unemployment rate.
The agency will review the city again in two years and did not expect any “negative rating pressure” in that time.