Published March 9th, 2014 at 10:40 AM
Kyle Geary — The Hale Center For Journalism
The City released information about the reviews, stating on KCMO.gov that the agencies “have affirmed the ratings for the City of Kansas City, Mo.’s outstanding special obligation bonds at A1 and AA-, respectively, both with a stable outlook.”
Special obligation bonds, such as these, are loans from specific revenue sources, similar to IOU’s.
Tammy Queen is the Kansas City, Mo., Treasurer. She says that the City is “very pleased with the affirmation of the ratings and that the rating agencies have taken notice of the City’s recent efforts to strengthen its financial profile.”
Queen explains why the review is important to the City, and what portions of the bonds will be used for.
“The Series 2014C portion of the upcoming bond issue will be a restructuring of a portion of the Power & Light District debt,” Queen said. “That means that we are refunding a portion of the debt and reducing payments during the next five years so that we can grow into our new pension payment requirements. At the same time, we are lengthening the final maturity date of this portion of the debt for this project. The main goal is to provide near-term budget relief so that we can get accustomed to making the full required contributions to the city’s four pension plans.”
The review was requested by the City, and while it evaluated the special obligation bonds, it also affirmed the ratings of the city’s general obligation debt, with the City receiving praise from Moody’s.
According to KCMO.gov Standard and Poor “views the city’s management conditions as ‘very strong.’” As well as expressing that “‘practices are strong, well-embedded and likely sustainable.’”