Minneapolis' credit rating raised as Rybak nears convention
- April 20, 2010 - 9:35 PM
Minneapolis has regained its Triple A credit rating from Moody's Investor Service, and the news couldn't come at a better time for Mayor R.T. Rybak.
Moody's posted the restoration of the city's AAA rating during the weekend, rejoining two other rating agencies that peg the city at their top ratings. The city announced it on Monday as Rybak is nearing a weekend when he'll learn whether he'll be the DFL's endorsee for governor. He's touting his experience in managing a budget crisis as a key qualification.
Moody's had downgraded the rating to Aa1 in 2001, before Rybak was elected, as city internal funds and pension obligations plunged into debt. Moody's last reviewed the city in December. The upgrade is part of a general upgrade of state and local credit, said city finance chief Patrick Born.
Two other debt-rating agencies didn't lower their rating of the city. Officials had argued to Moody's for several years that various debt management plans they'd instituted had put the city in better fiscal shape. The soundness of a city's credit is a factor in whether it pays more or less to borrow money.
Moody's downgraded the credit rating outlook for the state's Aa1 debt in February from stable to negative, citing a state budgetary reliance on one-time solutions and empty reserves. Born said Moody's returned the state's outlook last weekend to stable as part of a recalibration of state and local debt to put it on a fairer comparison with corporate debt.
Rybak credited the city's efforts to balance its budget each year on a five-year basis for the rating, saying the city held its financial discipline. The city typically raised its property tax levy by 8 percent annually during that period, mainly to offset cuts in state aid to local government.
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