ENCINITAS — Encinitas got some good news from credit rating services this week that should keep the cost of the Pacific View Elementary School site purchase and Moonlight Beach lifeguard tower renovations in line with the final city estimates.
Standard and Poor’s gave the $13 million in taxable bonds that will be sold to finance the activities a AA+ rating and reaffirmed the city’s AAA credit rating, the highest ratings the agency gives.
For Encinitas, the rating all but guarantees low interest rates on the bonds, which should keep the annual debt service payments within the $815,000 to $830,000 range that finance officials estimated at the Oct. 22 council meeting.
Supporters of the purchase, however, say the rating symbolizes more than that — it shows the city is on financially solid footing.
“The strong rating shows that we are managing our finances responsibly and have very low risk of default,” Councilwoman Lisa Shaffer wrote in her weekly newsletter.
Opponents of the purchase, including supporters who believe the city overpaid for the Pacific View property, have argued that debt service payments will limit the city’s ability to spend money on reducing the city’s street and facilities maintenance backlog. Reports in 2011 showed the city was $47 million behind in road maintenance and several other city facilities are in need of immediate or imminent maintenance.
Supporters have countered that an unexpected surplus revealed in the city’s recent unofficial budget totals will give the city even more flexibility to boost spending on road maintenance while making its debt service payments.
“The general fund surplus shows that we can afford the financing costs and still spend even more on road maintenance and infrastructure repairs, and we should,” Shaffer said in her newsletter.
