One of the most common complaints in muniland is over a lack of disclosure. Public officials often say too little too late about fiscal matters. That is why it was a pleasant surprise to come across the proactive response of Joseph Calabrigo, the town manager of Danville, California, to Moody’s announcement that it is reviewing credit ratings associated with lease-backed and/or general obligation debts issued by 32 cities in California.
Danville is a well-to-do town of 42,000 located about 30 miles east of San Francisco. The city has two sets of bonds outstanding that are included in the Moody’s review. These Certificates of Participation (COP) were issued to acquire and construct public parking in the downtown area. In speaking about it, Calabrigo was separating the review of these bonds from the general credit quality of Danville, which is one notch higher at Aa1.
From the Danville town blog:
Danville has an overall credit rating of Aa1, as assigned by Moody’s. This rating shows a strong credit profile and overall creditworthiness. The Town’s current Aa1 rating is not under review by Moody’s.
Right at the top, Calabrigo states the town credit rating is high and solid.
The Moody’s review is being conducted as a result of the change in the credit profile of the State of California and their concerns regarding the effect of the economy upon the State and cities in general. Moody’s representatives have characterized this as a “recalibration of the methodology” being used by Moody’s to rate lease-backed debt.
Calabrigo explains how Danville has just been swept up in a process that Moody’s is conducting for the entire state. He invites citizens to review the Moody’s report and provides a link: