Annapolis Mayor Joshua J. Cohen announced Moody’s is placing the City of Annapolis on a Watchlist for a possible downgrade of the City’s credit rating of general obligation bonds, currently rated Aa1. According to Moody’s this would affect approximately $79.3 million in outstanding debt.
The Watchlist action is based on a weakened General Fund financial position, as well as a negative undesignated fund balance.
“The watchlist designation comes as no surprise,” said Mayor Cohen. “Given the City’s recent financial challenges, which are shared by municipalities across the country, some bumps in the road are to be expected. But taking the long view, I am fully confident that we are on the right track to navigate the City out of these rough financial waters. Just as we made the difficult but necessary decisions to balance the budget, we will continue to take the necessary actions to put the City on solid financial footing.”
Moody’s will reconsider the Watchlist action after receiving recent operating information, including 2011 third quarter results, audited fiscal 2010 results and a new capital improvement plan from the City.
“Moody’s is taking into consideration the fact that the City’s new management team has implemented measures to correct the city’s internal accounting procedures and financial management,” said Finance Director Bruce Miller. “However, it is important to note that other rating agencies my take similar actions and the City will be ready to work toward maintaining its current ratings with all three agencies.”
A decision to downgrade the City’s rating or simply withdraw the City from the Watchlist will happen in the next 60 days.
