Mayor Stimpson comments on Moody's ratings review

Apr 28th, 2014

MOBILE, Ala. - Mayor Sandy Stimpson said today that the City of Mobile is working closely with Moody's Investors Service to review the city's finances ahead of a possible downgrade in the city's credit rating.

Moody's recently placed the city's ratings under review due to a "rapid deterioration" in the city's general fund and financial reserves during fiscal 2012 and 2013. The deterioration occurred in budget years prior to the Stimpson administration taking office on November 4, 2013.

Stimpson said the 60-day review was expected and that Moody's research was consistent with concerns raised by his administration during his successful effort to amend the fiscal 2014 budget. Moody's specifically mentioned the city's rising health care and pension costs, its failure to maintain adequate reserves and its recurrent practice of shifting money away from capital needs to pay for operations.

"We welcome Moody's input as we continue to implement a recovery plan that puts Mobile on sound financial footing," Stimpson said. "Their comments are a validation of our work to get control of city spending - an effort that started the first day we took office."

Stimpson said his administration will cooperate fully with Moody's during the review period, sharing budget information from prior years along with its projections for fiscal 2015.

Moody's currently rates the city's General Obligation Limited Tax debt at Aa2. Click here to read a copy of a Moody's statement announcing the review.