Information & Resources

Credit Rating Criteria

There are many criteria that the rating agencies examine when considering a credit rating. The Credit Rating Criteria below is intended to assist in understanding categories and criteria. Rating agencies obtain information from annual financial statements, audits, census, local planning reports, state labor department statistics, and other sources. Rating agencies are paying increasing attention to management as a factor in the rating process. The intangibility of management makes this more difficult to quantify.

Credit Rating Criteria
Multiple Year Trends and Single Year Geographic Analysis

MANAGEMENT	FINANCES	PLANNING	DEBT LEVELS	SOCIO-ECONOMIC
Board-Staff Relations	Fund Balance/ Discretionary Reserves	Budgeting-Operations & Capital	Direct (Issuer) Debt Levels and Retirement Rapidity	Employment by Industry & occupation
Union Contracts/ Outlook For Salary Increases/ Labor Peace	Cash Flow/ Liquidity	Capital Needs	Indirect (Overlapping) Debt Levels	Largest Employers - Issuer and Area Unemployment
Vision/ Strategic Planning & Risk Taking	Revenue Mix/ Balance/Growth of Base	Economic Development/ Redevelopment	Future Needs	Population Trends
Planning/ Preparation	Balance Sheet	Financial Goals	Issuance Authority/Availability	Largest Taxpayers/ Industry Concentration
Creativity/ Innovation	Revenues and Expenditures - Extraordinary items?	Growth Management	Debt Structure/ Asset Life	Per Capita & Household Income
Responsiveness	Tax Extensions & Collections		Pension & Retirement Obligations/ Funding	Home Values, Affordability, Ownership, Distribution
Consistency	Equalized Assessed Valuation (residential, commercial, industrial mix)		Availability of Internal Funding for Capital Purposes	Effective Buying Income - Personal Income
Operational Efficiency	Tax Rates (Individual Funds & Overall)		Off Balance Sheet Obligations	Private Investment Trends
Leadership Stability - Administrative & Elected	Ability to Compress Spending Growth		Source/Strength of Debt Repayment Revenues
	Revenue/Rate Raising Flexibility