ASSEMBLY AGENDA/MANAGER’S REPORT
THE CITY AND BOROUGH OF JUNEAU, ALASKA
Monday, May 21, 2012
Immediately Following the 6 p.m. Committee of the Whole Meeting
Assembly Chambers – Municipal Building
Special Meeting No. 2012-14
I. FLAG SALUTE
II. ROLL CALL
III. PUBLIC PARTICIPATION ON NON-AGENDA ITEMS.
(Not to exceed a total of 20 minutes nor more than 5 minutes for any individual).
IV. NEW BUSINESS
A. Moody’s Investor Service – Bond Ratings
The City and Borough of Juneau’s General Obligation Bonds have historically been rated by Moody’s Investors Service. The rating applies to the bonds that the CBJ issues directly into the market. Our last direct bond issue was in 2008. Since 2008, we have been issuing bonds through the Alaska Municipal Bond Bank and a CBJ rating is not obtained.
The world economic recession, and the economic position of state and local governments over the past few years, has resulted in Moody’s placing additional emphasis in follow-up evaluations of local government’s financial position. Approximately two weeks ago a Credit Analyst from Moody’s contacted the CBJ Finance Director, indicating that a review was in process. The majority of information used by the Analyst came from historical documentation.
The result of this review was a downgrade in CBJ’s bond rating from Aa2 to Aa3 (“3” is equal to a minus). Moody’s report was received on Thursday, May 17, 2012, and this report is included in the packet.
In summary, the report notes the reason for the down grade:
The downgrade reflects the City and Borough of Juneau's (CBJ) weakened financial flexibility as a result of consecutive years of draws upon reserves in the General Fund and other general operating funds.
The report also identified areas of strength as:
• Strong tax base did not experience any significant decline as a result of the recession and national housing collapse.
• Above average socio-economic indicators.
The report specified that two items in particular could cause the rating to go up:
• Significant improvement in General Fund reserves.
• Large increases in Assessed Values.
The downgrade will have no immediate material impact on the City finances as we are currently anticipating that our future bond issues will go through the Alaska Municipal Bond Bank. However, if we decided to issue bonds directly into the market the lower rating will result in an increase in the cost of borrowing.
V. EXECUTIVE SESSION
A. Waste Management – Update
B. Contract Negotiations - Update
VI. ASSEMBLY COMMENTS AND QUESTIONS
Note: Agenda packets are available for review online at www.juneau.org.
ADA accommodations available upon request: Please contact the Clerk’s office 72 hours prior to any meeting so arrangements can be made to have a sign language interpreter present or an audiotape containing the Assembly’s agenda made available. The Clerk’s office telephone number is 586-5278, TDD 586-5351, e-mail: firstname.lastname@example.org .