A city finance official says Minneapolis should face no problems borrowing money after Moody’s Investors Service downgraded the city’s rating.
Moody’s changed the rating from Aaa to Aa1 based on concerns about they city’s future pension obligations.
Minneapolis finance director Kevin Carpenter says that’s only down one notch and the other two rating services have not changed their rating.
“We’ve always made our pension payments; we will always make our pension payments,” Carpenter said. “The downgrade in this case is disappointing, it’s unfortunate at some level. It’s not surprising, and we believe it’s an overreaction to our fiscal condition.”
The downgrade came after Moody’s revised the way it analyzes pension liabilities. Carpenter said the service is relying on old information, using calculations that inflate the city’s obligations.
“That gives them concern about cities’ ability to meet those obligations going forward,” Carpenter said.
Carpenter pointed to positive factors in the rating, including the city’s role as an economic center with diverse employment opportunities, well-managed financial operations, and willingness to raise taxes.