D.C. bond ratings likely not moving, councilman says

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Local,DC,Alan Blinder,D.C. Council,David Catania,Jack Evans

A D.C. councilman said Tuesday that he doesn't expect the nation's credit ratings agencies will boost the District's standing this year.

"Moody's and Fitch were not inclined to give us an upgrade in any category at all," said Ward 2 Councilman Jack Evans, who chairs the D.C. Council's finance panel and was part of a delegation that traveled to New York last week to meet with the agencies. "At best -- and I think this is still a longshot -- we might get an upgrade from [Standard & Poor's] on our [general obligation] bonds."

Evans said the agencies logged three concerns during their sessions: the effects of sweeping federal budget cuts, the retirement of city CFO Natwar Gandhi and the District's continued involvement with United Medical Center.

But at-large Councilman David Catania, one of the council's foremost defenders of the hospital, questioned whether the agencies should be so concerned about the status of United Medical, which consumes well less than one-tenth of 1 percent of the city's budget.

"If that rises to the level of one-third of their concern about D.C., I don't know if we'll ever please them," Catania said after other legislators noted the city posted a $417 million budget surplus last year, pushing its savings account to more than $1 billion.

And he wondered whether the city needs more plaudits from Wall Street.

"I don't need the affirmation of the people who brought us the meltdown of the economy," Catania said.

But Evans and other city leaders contend that an upgrade in bond ratings could save D.C. taxpayers tens of millions of dollars and defended the District's efforts to win Wall Street's praise.

Although Evans had slim hopes of an upgrade this year, he said he "can't imagine" that the agencies won't boost the city's standing once sequestration -- the technical term for massive, automatic federal budget cuts -- is resolved.

S&P has not upgraded the District's general obligation bond rating since 2005. Moody's and Fitch both gave the city higher ratings in 2009.

Those ratings are A+ by S&P, Aa2 by Moody's and AA- by Fitch.

ablinder@washingtonexaminer.com

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Alan Blinder

Staff Reporter, D.C. City Hall
The Washington Examiner