DARLENE GREEN

COMPTROLLER

NEWS NEWS

NEWS

For Immediate Release

Date: August 17, 2015
Contact: Melanie Streeper

Phone: (314) 613-7360

Email: streeperm@stlouis-mo.gov

Comptrollers response to credit rating downgrade

ST. LOUIS, August 17, 2015Last week Moodys credit rating agency downgraded St.
Louis GO and lease revenue debt by one notch. St. Louis GO debt is down from A1 to
Aa3 and lease revenue debt ratings to A2 from A1 for essential purposes and to A3 from
A2 for nonessential purposes. The city retained its stable outlook.
The move to lower the bond rating by one notch is due in part to the rating agencys revised
rating methodology. In addition, the citys high debt profile, low liquidity and reserve levels,
and socioeconomic indices are factors as well. The city continues to manage these
financial challenges in a fiscally responsible and prudent manner with strong financial
management practices such as conservative budgeting. The city has taken steps to
increase revenues and decrease expenditures in order to strengthen its profile and
increase reserves.
Despite the downgrade, Moodys gives the city high marks for strong financial management
practices, reductions in personnel and discretionary spending and revenue reallocations.
The citys year-end surplus of $2.3 million signals a return to a positive growth trend, aiding
the citys effort to increase reserve fund balances and ease liquidity.
The city believes that the earnings tax will pass again next year, since voters
overwhelmingly approved it in 2011 by a margin of almost 9-to-1. The city has been
proactive about planning for the future. The Comptrollers Office commissioned a 10-year
long range plan that is meant to help ensure structural balance so that recurring revenues
meet recurring expenditures and the city is able to meet its reserve targets and improve
liquidity.
The city has a large and diverse tax base that has stabilized over the years. The private
sector continues to provide a trend of strong economic development in the city with several
large developments currently underway. The City of St. Louis continues to act as a regional
hub in the Midwest for the healthcare, higher education, manufacturing and finance
sectorsaccording to Moodys.
In closing, the city is continuing to be managed prudently, is recovering financially and
features vibrant economic growth.
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