Ratings Agencies Provide Insight into the Challenges Facing Lake Oswego

TO All COLA LO Members,

Last month the bond ratings agencies provided insight when they rated the $77 million in Full Faith & Credit (FF&C) bonds issued by the city to pay for the LO-Tigard Water Project. 

 In previous reviews the rating agencies asked limited questions and focused on the city's commitment to LO School District when it provided an additional $1.2 million in funds through a franchise fee increase. 

This bond review although rated AAA, clearly detailed the challenges facing Lake Oswego.   In the report the analysts stated the following:





CHALLENGES

- Slow debt amortization

- Recent stagnation in tax base's Real Market Value

WHAT COULD MOVE THE RATING-UP

- n/a

WHAT COULD MOVE THE RATING-DOWN

- Deterioration of financial position due to greater than expected declines in operating revenues

- Prolonged downturn in the local economy

- Substantial deterioration in the city's socioeconomic measures

In short the analysts were saying that the city must maintain its property values and its affluent resident base to maintain its credit rating over time.  


 Its a clear signal of the issues facing Lake Oswego over the long run as the population matures.  

 To maintain its credit rating the city must continue to maintain a wealthy base of citizens who will support an ever growing debt burden while it also ensures conservative financial policies are maintained.   That's no easy task in a poor economy without a very precise plan and action.   

The report can be found at the following link:  LO Bond Rating.

Basic socioeconomic information on LO can be found at:  Lake Oswego Wiki

Please notify all members, contacts, and friends.