Independent Financial Agencies Upgrade City of Tacoma's Bond Ratings Amid Broader Economic Uncertainty

~ The City of Tacoma has recently received positive upgrades to its municipal bond credit ratings from two major financial evaluation agencies, Moody's and Fitch Ratings. These upgrades have moved the city's financial profile to just one step below the highest possible tier.

Moody's upgraded the City's General Obligation (GO) bonds from Aa2 to Aa1, which is equivalent to moving from an AA to an AA+ rating. Similarly, Fitch Ratings upgraded Environmental Services (ES) Solid Waste bonds from AA to AA+ and maintained the current, highly rated AA+ status for ES Stormwater and Wastewater bonds. This puts the City at an AA+ equivalent across these major bond categories, just one step below the maximum "triple-A" (AAA) rating. Standard & Poor's (S&P), another major financial evaluation agency, also currently rates the City at AA+.

According to these agencies, the upgrades are a result of the City's strong fiscal management despite facing ongoing economic uncertainty. The City has been able to maintain a favorable financial profile due to its financial discipline, strong fiscal oversight, and proactive fiscal policies.

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For local governments, credit ratings serve as an independent measure of a municipality's creditworthiness and financial stability. It is similar to a personal credit score and indicates to lenders and investors that the City is a low-risk borrower. The elevated ratings are a testament to several key factors that have contributed directly to the City's financial profile.

These factors include strong overall financial performance and debt management, healthy balances in reserve funds, steady population growth, and a diverse economic base of local employers. Additionally, the strength and tenure of the City's management team have also played a significant role in maintaining its high credit ratings.

The City Council's demonstrated willingness to balance budgets, build reserves, maintain sound financial policies, and make gradual adjustments to rates and revenues has also been recognized by these agencies as contributing to the City's financial stability. These measures have helped protect residents from sudden financial shocks.

The City of Tacoma's upgraded credit ratings are a positive sign for its future financial outlook and demonstrate its commitment to responsible fiscal management. With these upgrades, the City is well-positioned to continue providing essential services to its residents while maintaining a strong financial profile.

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