COLUMBIA, 8/8/11 (Beat Byte) -- With several compliments that support Columbia City Hall's strong financial position, Big Three ratings agency Fitch last week affirmed the city's AA credit rating as fellow ratings agency Standard & Poor's downgraded the U.S. government.
Fitch gave Columbia special obligation and electric utility improvement bonds -- essentially investor-driven loans to city government -- the high rating, adding a more generalized "unlimited tax general obligation (ULTGO) rating of AAA" in their August 3 report.
"The ULTGO rating reflects a diverse and growing economic base anchored by a university community," Fitch noted. "A strong financial management team that has demonstrated a commendable record of proactive fiscal operations has provided the city with ample financial flexibility, counterbalancing a dependence on economically sensitive revenue."
With a "low debt burden," Columbia also enjoyed 5.8% unemployment as of May 2011 -- considerably lower than the state at 8.8% and the nation at 9.3%, the agency reported. Specific to City Hall, "general fund revenue sources are diverse," including property taxes, sales taxes, and payments in lieu of taxes (PILOT).
Past reports of "dire financial straits" from previous city administrators also appear baseless, according to Fitch.
"Columbia's general fund had a net surplus in four of the last five years, and the fiscal 2010 unreserved general fund balance was $21.5 million or a strong 30% of spending," the agency noted. "The city's total fund balance will remain well above the 16% policy goal set by the city, even after planned draw downs in 2011 and 2012."