The City Council recently approved the issuance of $15.6 million of lease revenue bonds to finance a portion of the project costs for the City’s new Public Library. The majority of the project costs are being funded with cash on hand accumulated by the Library over a number of years through operating surpluses, with the balance to be funded with the issuance of the bonds. As the City has not had any debt outstanding since 2013 other than for its former Redevelopment Agency, the City has not had an active issuer credit rating. With the issuance of the bonds for the Library, Standard & Poor’s (S&P) is once again rating the City. The City received a AAA issuer credit rating, which is the highest credit rating that a local government can receive. Highlights of the Standard and Poor’s report include their assessment of the City’s:
- Very strong economic conditions, both in the City and the region;
- Very strong financial management, including significant financial policies;
- Strong budgetary performance and consistent budget surpluses; and
- Strong liquidity, low debt levels, and budgetary flexibility.
The bonds issued for the Library will be fully repaid from existing property tax revenues that are restricted for Library purposes. No General Fund money or new or increased taxes will be required to construct the Public Library facility. The building of the adjacent Cultural Arts Center is being funded entirely with cash on hand generated from prior General Fund budget surpluses and the sale of surplus City property. No debt will be issued for the Arts Center facility.