The City of West Hollywood remains in a “very strong financial position” according to Fitch Ratings, which recently reviewed the City’s bonds and overall financial operations including its lease revenue bonds (LRBs) series 2009 A & B at ‘AA+’ and implied general obligation bonds (GOs) at ‘AAA.’
According to the recent Fitch Ratings report, “The city’s financial profile is very strong. General fund revenues are well diversified by source and reached an all-time high in fiscal 2012, though a significant portion of revenues are economically cyclical. Fiscal 2011 general fund operations (the last year the audit is available) produced a solid $6.6 million surplus, after transfers, raising the total and unrestricted general fund balances to extremely high levels of $75 million (121% of expenditures and transfers out) and $74.4 million (119.7%), respectively. Unaudited data for fiscal 2012 points to a surplus of $1.9 million, and the city’s fiscal 2013 budget is balanced. Fitch believes the city may outperform its budget given management’s history of conservative revenue budgeting and strong year to date revenue performance.”
Fitch cited the City of West Hollywood’s stable tax base and local economy, and high wealth levels, as reasons for its exceptional ‘AAA’
The Fitch Ratings report continued, “The city’s net debt levels are moderately high due to overlapping debt but affordable. The city’s record of significant pay-as-you-go financing is a credit strength. Capital needs are manageable but amortization is slow. The city participates in CalPERS and related pensions and Post-Employment Benefit (OPEB) liabilities are currently manageable and Fitch expects recent state-wide pension reforms will lower out-year pension cost growth rates.”
Fitch Ratings’ report stated that the City’s “economic indicators are good overall.”