The city of San Luis Obispo has maintained its strong bond rating from Fitch Ratings, a leader in credit ratings and research, which praised the city’s “excellent financial management,” according to a city news release.
A higher 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.
Fitch retained its AA rating on the city’s lease revenue bonds, a form of long-term borrowing used to finance public improvements where the city pays off the debt using existing revenue.
Fitch said it would give the city a AA+ rating — one step below the highest AAA rating — if it were to issue a general obligation bond, a form of long-term borrowing used to pay for public projects that requires voter approval; the city pays off the debt by levying an extra property tax assessment. The city has no general obligation debt now, said city finance director Wayne Padilla.
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Fitch called the city’s rating outlook stable, Padilla said.