The bond-rating agency Standard & Poor’s (S&P) gave Malibu the highest possible credit rating as part of the refinancing of the bonds that were used to purchase Legacy Park and improve City Hall, which will save taxpayers millions of dollars, Mayor Pro-Tem Laura Rosenthal announced at the April 13 City Council meeting.
“Malibu has scored the highest credit rating a city can get, underscoring the economic health of our community and the City’s commitment to fiscal responsibility and sound management,” Mayor Pro Tem Rosenthal said. “These high bond ratings will allow us to re-finance our City Hall and Legacy Park bonds and save taxpayers millions of dollars over time.”
Thanks to the high rating, the Legacy Park and City Hall Certificates can be refinanced to take advantage of low interest rates, which will save taxpayers about $139,000 annually, and will yield total savings of approximately $3.3 million over 24 years.
The City met with S&P on March 25, 2015 to provide a credit presentation, and S&P gave Malibu a AA+ credit rating with an implied AAA general obligation bond credit rating, its highest possible rating, for the lease financing the City is undertaking.
In its report, S&P listed the many factors that contributed to Malibu‘s high rating, including its very strong economy, proximity to the L.A. area’s large and diverse economy, per capita income that is much higher than the nationwide average, strong management with good financial policies and reduced operational risk, strong budgetary performance, maintaining an operating surplus in the general fund and a minimum 50% General Fund reserve, very strong budgetary flexibility, with an available fund balance in fiscal 2014 of 76% of operating expenditures, very strong liquidity, and a strong debt and contingent liability position.
“We believe Malibu‘s desirability as both a permanent residence and a tourist destination will continue to provide credit stability,” S&P Credit Analyst Bryan Moore wrote.
The City of Malibu was incorporated on March 28, 1991. Located in northwest Los Angeles County, the City has 21 miles of coastline along the Pacific Ocean and a population of 12,575. For more information on the City please visit www.malibucity.org.
