I am very pleased to report that just one week after I joined Mayor Bowser, Chairman Mendelson and CFO Jeff DeWitt to meet with the major credit-rating agencies, Moody’s Investors Service upgraded the District of Columbia’s General Obligation (GO) bonds to Aa1 from Aa2, one notch below AAA, the highest level. This is a very exciting, and long overdue, move by Moody’s that will make it easier for us to make the strategic capital investments that will benefit the District for years to come.
The rating increase affects $2.8 billion of outstanding GO bonds. In addition to upgrading the rating on our general bonds, Moody’s raised the Tax Increment Funding (TIF) rating to Aa3 for $43.5 million of rated tax-increment financing bonds.
In my last note to you, I talked about all of the reasons I believe we deserved this upgrade. I won’t list them all again, but I will say that the District is in a very strong financial position. Our leadership is committed to financial discipline, our reserves are strong and the District economy continues to grow and diversify.
In their report, Moody’s stated, “Financial governance is particularly strong, including multi-year financial plans, debt affordability analysis and mandated reserves, which provide a robust framework for the District to maintain a healthy financial position going forward.”
The report continued, “The general obligation upgrade to Aa1 reflects a variety of strong credit features and a degree of resilience in the District’s economy to federal downsizing. The District’s fund balances have continued to strengthen in recent years and are on a trajectory to continue to increase in the next several years.”
This is very good news for the District, but the work of financial stewardship is never done. I’ll continue to provide the strong oversight of our financial agencies and budget processes that I have for the last 15 years as chair of the Finance Committee. I look forward to writing to you in the not-too-distant future about our bond rating achieving AAA status.
On a related note, Mayor Bowser will submit her first budget request to the Council in the coming weeks. I will be sure to share the highlights of the budget and my thoughts on the mayor’s proposal to fund critical items such as school improvements, street and alley repairs and affordable housing. I also want to encourage anyone who is interested to watch or testify at the budget oversight hearings that the Council will hold over the next month. A full schedule can be found on the D.C. Council website.
Jack Evans is the Ward 2 Councilmember, representing Georgetown since 1991.