The City of Fontana has received a credit and bond rating upgrade, reflecting the investment community’s confidence in the city’s financial health, according to a news release issued by the city.
Standard & Poor’s raised Fontana’s issuer credit rating from AA- to AA and its lease revenue bond rating from AA- to A+. Higher credit and bond ratings indicate that the city has a strong capacity to meet its financial commitments, and can result in lower interest rates, reduce the cost of debt issuance and attract a broader market of potential investors, the news release said.
“We’re pleased with the upgraded ratings, which reflect the prudent financial practices and policies that the City Council and our management team have established,” said Mayor Acquanetta Warren. “For the first time ever we have implemented a two-year budget. This will not only save time, but also provide enhanced fiscal transparency, increased accountability and greater stability.”
Among the highlights of the City’s presentation to S&P:
• The city’s property tax base continues to grow — up 6.6 percent year over year with a total assessed value of $24 billion for fiscal year 2022. Much of this can be traced to robust commercial and residential development throughout Fontana.
• The strength of the city’s supply chain and logistics industry and its healthcare industries, which employ nearly 21,000 workers between them, have been vital to the city’s ability to weather the COVID-19 downturn.
• The city has adopted financial policies aimed at balanced growth and fiscal discipline. As of June 30, the city had a contingency reserve of $18.9 million, an economic uncertainty reserve of $8.5 million, and a PERS retirement reserve of $5.9 million.
When the pandemic emergency was declared in early 2020, the City Council took immediate action, with all departments asked to reduce expenses. Along with COVID-19 relief funds, the measures implemented by the city allowed it to end the 2020-21 fiscal year with a surplus.
"This is definitely a huge accomplishment for the City," said City Manager Mark Denny. "It is confirmation of the City’s strong financial management, and effective Council-adopted financial policies.”