Written by The Business Journal Staff
Fitch also affirmed the city’s overall rating outlook as “stable.”
The improved credit rating actually represented a two-step upgrade, since Fitch’s next higher level after BBB+ is A-, said Mark Standriff, Fresno’s communication director.
The upgrade impacts the $95 million Fresno Joint Powers Financing Authority (Fresno JPFA) lease revenue bond (LRB) series 2008A, 2008C, 2008E, 2008F, 2004A and 2004C as well as the $41.9 million Fresno JPFA LRB series 2009A and 2006A bonds.
The bonds are payable from lease rental payments from the city (the obligor) to Fresno JPFA (the issuer) for use and occupancy of various governmental assets.
“Operating performance is normalizing after a prolonged period of financial stress during and after the last recession,” stated a press release issued by Fitch.
“The city’s reserves have increased rapidly following expiration of inflexible long-term labor contracts, expenditure cuts, renewed growth in revenues and improvements in financial management. The city appears adequately positioned to withstand typical cyclical stress and is expected to increase financial flexibility to more robust levels in the near term.”
Fitch’s revision follows a number of announcements in 2014 and 2015 from the three most prominent rating agencies that had revised their outlook on the City of Fresno’s long-term ratings to either Stable or Positive.
“This is tremendous news and a strong validation of our decision to rebuild our city’s finances by paying off our debt, building up our reserves and stabilizing our labor contracts,” said Mayor Ashley Swearengin. “It’s yet another indication that the smart, responsible, balanced solutions we have implemented at City Hall are not only building a stronger, more sustainable future for Fresno, but they are also reaping rewards for our residents in the present.”