News Release: Fitch Ratings Affirms Leesburg’s AAA Bond Rating Despite COVID-19

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Town of Leesburg, Virginia
News Release

For Immediate Release
June 12, 2020

Media Contact:
Leah Kosin, Assistant Public Information Officer

Fitch Ratings Affirms Leesburg’s AAA Bond Rating Despite COVID-19

Leesburg's 'AAA' General Obligation bond rating reflects historically stable revenues with solid growth prospects.

Leesburg, VA (June 12, 2020) – Fitch Ratings has affirmed the Town of Leesburg’s AAA Bond Rating, with a stable outlook. AAA is the highest rating a municipal government can receive. Key drivers to the rating included a strong economy, strong management, budgetary flexibility, and overall liquidity.

Taking into account the pro-active and planned budgetary responses by Town management to the coronavirus pandemic, the Town expects to continue to meet its 20 percent reserve policy, based on the unassigned fund balance only, reflecting robust scale resilience.

Town management had indicated Fiscal Year 2020 revenues were trending above budget projections through March 2020, prior to the pandemic, but is now projecting a $3.6 million, or 6.3 percent, decline compared with the budget through Fiscal Year 2020 which ends on June 30.

The decline in Town revenue is primarily associated with a drop-off in restaurant meals and hotel taxes and recreation fees due to the closure of Ida Lee Park facilities. Business license fees are also below projections, resulting from the current economic and public health crisis, and policy action by the Town to extend and defer tax payments. Town management is addressing the revenue shortfall through a combination of higher than projected revenues from sources that have not been affected by the crisis and reductions of operating expenditures.

“We reviewed Leesburg’s COVID-19 fiscal response plans with Fitch, and their confirmation of our AAA Stable rating clearly reflects their confidence in our approach to managing the financial impacts of the crisis,” said Clark Case, Leesburg’s Director of Finance and Administrative Services.

Leesburg has solid expenditure flexibility and a very healthy level of fund balance that also contribute to its high gap-closing capacity. Fitch expects the town to manage through near-term fiscal pressures from the coronavirus-driven economic slowdown.