PARK CITY — Sometimes even an A-plus just isn't good enough.
Such was the case for the Park City government, which recently got the news that its A-plus bond rating was being changed by Standard & Poors.
That news was good, by the way.
The nation's pre-eminent financial rating service informed Park City this week that it had upgraded the city's General Obligation Bonds grade from an A-plus to an AA-minus. S&P analysts gave the city extra credit for its continued strong financial growth, rising wealth levels of the full-time population and conservative fiscal management leading up to, during and following the 2002 Winter Olympics.
S&P, which evaluates ratings every few years, had been hesitant to give Park City the higher endorsement it coveted, but the city made a strong statement with its pre- and post-Olympic fiscal performance.
"We're thrilled about S&P's announcement," said Park City budget director Mark Christensen. "It's a good indicator of the city's relative (financial) health."
A AAA rating is the highest obtainable score in S&P's system, which helps determine a city's credit-worthiness and financial strength to potential lenders. Basically, the higher the rating, the easier it is to borrow money at lower finance rates for development and projects.
In other words, Park City would make for a great loan co-signer about now. It has received similar ratings by financial agencies Moody's and Fitch.
Earning an AA-minus from S&P is an accomplishment for Park City because of its status as a seasonal town that relies on skiing and tourism for much of its economy. For comparison's sake, Aspen was also upgraded to AA-minus status — considered a coup for both places.
"It's still a very strong rating — especially for a resort community," Christensen said. "The seasonality of resort communities typically made it more volatile."
The S&P report listed multiple factors in boosting Park City's rating:
Sound financial performance as evidenced by five consecutive general fund operating surpluses, before transfers, and an increase in sales tax revenues.
Having an affluent residential community, which, according to 2001 estimates, boasts a high per capita income that has increased to 203 percent of the national average. That significant increase — 153 percent of the national average in 2000 — probably relates to an Olympics-related inflow of wealthy residents.
Proximity to Salt Lake City (30 miles), tempering the cyclical nature of local employment and tourism dependence.
Growing and diverse tax base with a large contingent of second homes — about 50 percent of total base.
Conservative fiscal management leading to solid financial performance and reserve cash. Christensen pointed out how the city manager and council had slowed expenditures prior to the Olympics, even making an across-the-board 5 percent budget cut from all departments.
Strong property value due to ongoing development and price appreciation. Total taxable value of property has grown by 56 percent in five years.
High and rising per capita debt, which is manageable now but could turn into a liability if debt levels continue to rise.
E-MAIL: jody@desnews.com