The private and independent credit rating firm, Standard & Poor’s Rating Services, has assigned the City of Santa Ana its first city issuer credit rating. Not only is this a first for the City, the outstanding credit rating of AA is a significant statement about Santa Ana’s financial health.
An issuer credit rating is an independent evaluation of the credit worthiness of an issuer. Credit ratings are forward-looking opinions about credit risk and express the agency’s opinion about the City’s financial ability to meet its financial obligations in full and on time. The AA rating differs from the highest possible credit rating of AAA only by a small degree. The AA rating indicates a very strong commitment from the issuer to meet its financial commitments.
Mayor Miguel Pulido commented, “This rating is a testament of our commitment to improving our fiscal strength and will enable the City of Santa Ana to continue to enhance services in the community.”
Standard & Poor’s evaluation of Santa Ana included an extensive and rigorous review of seven major areas which include institutional framework, economy, financial management, budgetary flexibility, budgetary performance, liquidity, debt, and other contingent liabilities. “Santa Ana’s elected leadership and strategic management successes have produced an excellent AA credit rating and clearly demonstrates Santa Ana’s strong management framework and positive financial performance,” said City Manager, David Cavazos.
Since 2012, City leadership and management have taken a variety of steps to strengthen Santa Ana’s finances to ensure the continuous delivery of programs and services. These actions include the development of strong fiscal and budget policy, exceeding the 20% percent reserve goal, solidifying the Utility Users Tax revenue through a voter initiative, rebalancing the jail revenue and cost structure, and changing the service delivery model for the provision of fire and medic services.
As stated in the Standard & Poor’s credit review, “We view the city’s management as very strong with strong financial policies and practices. In addition, Santa Ana’s budgetary flexibility is viewed as very strong.”
Mayor Pro Tem Vince Sarmiento noted, “Santa Ana’s success in achieving the AA credit rating is a result of our commitment to strong financial discipline, for instance, exceeding our $40 million reserve target ahead of schedule.”
“Our path to financial stability has been remarkable,” shared Councilman Sal Tinajero. “Achieving a $25 million surplus over two years is one of our many significant accomplishments. I am proud to be part of our City’s leadership which is working diligently to improve the quality of life for all our residents,” Tinajero added.
Standard & Poor’s is a national rating agency, which is recognized for their expertise in rating government agencies. Standard & Poor’s vote of confidence is not only a result of Santa Ana’s current accomplishments, it is also indicative of Santa Ana’s stable and positive outlook for the future.
“As the center of government, commerce and transportation, Santa Ana’s strategic location in the heart of Orange County places us in a strong position to leverage our community’s diverse and young population, with job growth projected to continue,” said Councilman Roman Reyna.
Councilwoman Angie Amezcua stated, “With an attractive real estate market, strong education partners, and vibrant business activity, Santa Ana has even more potential. I am excited about our future.”
Adoption of the City’s five-year strategic plan, economic development attractors such as the future streetcar, vibrant downtown, diverse revenue base, and central location all played a vital role in Standard & Poor’s credit evaluation.
