Minneapolis gets highest credit ratings

The City of Minneapolis has again received the highest credit ratings, despite financial challenges in this difficult economy. Both Fitch Ratings and Standard and Poor’s Ratings Services assigned the City of Minneapolis the highest rating possible, AAA. Moody’s also gave the City a very high Aa1 rating.

All three rating agencies noted Minneapolis’ strong financial management as key to earning high ratings:

• Standard & Poor’s said Minneapolis’ management practices were “strong, well embedded, and likely sustainable.”
• Moody’s said that “Minneapolis has a long history of strong financial management and controls, a well-managed budget process, and a system of setting and meeting goals as evidenced by its institutionalized multi-year financial planning.”
• Fitch reported “The City’s ‘AAA’ rating reflects its broad economy, strong and consistent financial performance, ample financial flexibility, prudent long-term planning, and moderate tax-supported debt levels.” It noted that the City has managed significant cuts in state funding to Minneapolis in recent years and that the city has contingency plans for managing further expected cuts in the coming years.

The agencies noted some of the financial challenges Minneapolis is likely to face in the next several years, including decreasing state funding, mounting pension obligations, growing public safety expenses, and economic conditions that include a weakened housing market, residential foreclosures, a slowdown in job growth, and a rise in unemployment. Despite these challenges, Moody’s noted that it believes Minneapolis will “continue to retain its economic preeminence as a diversified Midwestern urban center.”

In the last several years, Mayor Rybak has worked to streamline City services, find efficiencies and address financial challenges head-on. Long-term financial planning in place since the Mayor was elected has maintained City reserves and meant that ongoing expenses are supported by ongoing revenue. Mayor Rybak has focused on decreasing Minneapolis’ debt and since he took office and $86.5 million in debt has been eliminated in that since 2002 when he bacame mayor.