THE VIRGINIAN-PILOT
Copyright (c) 1996, Landmark Communications, Inc.
DATE: Saturday, June 8, 1996 TAG: 9606080375
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
SOURCE: BY MYLENE MANGALINDAN, STAFF WRITER
LENGTH: 41 lines
Despite fiscal problems with its school district, Virginia Beach has proven it is still financially sound, according to two credit-rating services.
Both Standard & Poor's and Moody's credit agencies reaffirmed Virginia Beach's AA bond rating this week for the city's $58 million general obligation public improvement bond sale on Tuesday. The city has received an AA rating, the third-highest possible among bond ratings, since June 1975. Bond sales occur every year and a favorable rating assures that the investment is low risk.
``We would've been surprised if our rating had gone down,'' said Patricia Phillips, the city's finance director.
Tuesday's sale of general revenue bonds will help finance the city's schools, tourism, economic development, building projects, parks and recreation, and roads, Phillips said.
Both credit agencies attributed the strong rating to the city's solid financial performance. Virginia Beach has a moderate debt burden, a strong regional economy, low unemployment and good income levels, the rating agencies concluded.
This rating is significant because it shows the city is capable of handling its finances well, despite problems that arise, such as the school district's $12.1 million budget shortfall, said Edward Krauss, vice president of Moody's public finance department. The city's handling of the school situation shows officials are on top of the city's financial operations, Krauss said.
``We never like to see these problems arise,'' he said, ``but since they have, they've been able to solve it quickly. That would be expected from an AA, and that's what they've done.''
Both rating agencies also looked at the city's triumph in the initial construction of the Lake Gaston pipeline.
KEYWORDS: BOND RATING VIRGINIA BEACH< by CNB