Standard & Poor's Raises Long Beach Rating
(December 20, 2005) -- Standard and Poor's Ratings Services today (Dec. 20) revised its outlook on Long Beach's rating from negative to stable, affirmed its 'AA-' issuer credit rating on Long Beach and affirmed its 'A+' rating and underlying rating (SPUR) on the city's appropriations-backed debt.
Quoted in a City Hall release, Standard & Poor's announcement today said, "The outlook revision reflects the near-completion of the City's three-year financial plan, which has resulted in the substantial reduction of a $102 million structural budget deficit between fiscals 2002 and 2005 and the maintenance of good reserves."
City Hall's release quoted LB Mayor Beverly O'Neill and other city officials in response:
"Standard and Poor’s recognition of, and response to, the City’s unprecedented effort to reduce the City’s structural deficit from $102 million to $10 million in just three years is welcomed news and makes me very proud of this City. The reduction of the structural deficit demonstrates what can be accomplished when the community, elected officials, employees and management work together toward a common goal," said Long Beach Mayor Beverly O’Neill.
The City’s Financial Strategic Plan (Plan), which was endorsed by the City Council in 2003, included a number of solutions to balance what at that time was a projected $102 million deficit in the City’s General Fund. These solutions included both reductions in expenditures for City services as well as proposed new revenue sources, such as increases in fees charged to the public for services and higher investment returns on City assets. Over the past three years, implementation of the Plan has resulted in over 400 City positions being eliminated without lay-offs, efficiency gains in several key service areas, extensive reductions in equipment and support costs, and reduced City service levels. Consequently, the structural deficit in the General Fund was reduced by $92 million from $102 million to $10 million.
"I am proud of the discipline that has been demonstrated in recent years by both City employees and the City Council in facing the structural deficit that has burdened us for so long. Hard decisions were made and expenses were cut. Many of those cuts were unpopular but ultimately necessary. The improvement in the City’s credit rating is validation that we are on the right course," said Gerald R. Miller, Long Beach City Manager.
"The City’s financial plan provides elected officials, management and City employees with the tools needed to face financial realities. We are pleased that Standard & Poor’s has recognized our tremendous effort. The City must continue to make tough decisions to close the final portion of the budget deficit. I am confident, given our success to date, that this organization will achieve that goal," said Michael A. Killebrew, Director of Financial Management/CFO.
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