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EL SEGUNDO, CALIF. (August 21, 2023) – The City of El Segundo is pleased to announce Standard & Poor’s (S&P) Global Ratings has raised its credit issuer rating from a AA+ to AAA, the highest rating a municipality can be assigned. S&P is a leading provider of transparent and independent credit rating worldwide. This is an increase from the City’s previous rating as of May 2021.
“I could not be prouder of the hard work that the City has put in over the last seven years to further strengthen our city’s finances and over the last couple of years working towards this AAA rating. It hasn’t always been easy, but City Council and our City staff continue to remain diligent as fiduciaries in an ever-changing landscape,” said Mayor Drew Boyles. “It is a testament to our commitment to keep El Segundo a great place to live, work and visit.”
S&P stated El Segundo’s position as a key employment and entertainment hub within the broad and diverse Los Angeles County metropolitan area continues to spur healthy economic growth for the City. “Our ongoing efforts to attract more businesses to El Segundo and building upon these economic development opportunities is a priority for the City, this upgraded rating is a major contributing factor in continuing our reputation as a business-friendly city,” said City Manager Darrell George.
S&P credited the City’s strong financial policies and practices by an established management team, continued commercial and corporate growth, and the quick revenue recovery of its well diversified and flexible general revenues following a decline during the global pandemic as reasons for the upgrade. This year, City Council increased its General Fund reserve policy goal from 20% to 25% and established a 5% General Fund Reserve for capital improvement projects (CIP), which was another factor in the upgrade.
“This S&P upgrade is great news for the City as they affirm that we are taking the right steps to improve the City’s credit,” said Interim Chief Financial Officer David Cain. “The upgrade is the product of the dedicated hard work by City staff and the support of City Council to adopt strong financial policies and practices over the last several years.”
The new Topgolf private investment, in addition to providing over 500 jobs and adding to the tax base, will bring in recurring general fund revenue, further diversifying the City’s revenue structure. In 2022, El Segundo voters approved Measure BT, amending the City’s ordinance governing the City’s business tax which will bring in additional ongoing revenues that will continue to support important City services and programs. Additionally, the City’s residential market remains active, with multiple housing projects underway.
In its Credit Highlights, S&P stated, “The rating change reflects our improved view of the City’s policies and procedures, which have partially fueled multiple positive operating results over the last four years, it’s very strong financial position, and its bolstered revenue profile.”
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