And finally, for something besides effort
Mammoth Lakes Town Manager Dan Holler revealed that the Town’s credit rating has been bumped upwards at the Mammoth Lakes Lions Club luncheon on Wednesday.
Holler said the Town now has an A rating, considered “upper medium grade.”
Its former rating had been a BBB-, considered “lower medium grade.”
According to Standard and Poor’s, an obligation rated A is somewhat more susceptible to the adverse effects of changes in circumstances and economic conditions than obligations in higher-rated categories. However, the obligor’s capacity to meet its financial commitment on the obligation is still strong.
An obligation rated BBB exhibits adequate protection parameters. However, adverse economic conditions or changing circumstances are more likely to lead to a weakened capacity of the obligor to meet its financial commitment on the obligation.
Holler said the rating change will allow the Town to save a significant amount of money by refinancing its airport litigation obligation.
The Town pays 5.75% interest on its current loan.
Holler thinks the Town should now be able to reduce that interest rate by a percentage point or more, shaving the total airport payoff by $2 million over the life of the loan.
At the Lions luncheon, Holler said Standard and Poor’s was swayed by Mammoth’s strong economy the past two years particularly the increase in summer business. Mammoth’s relative lack of long-term debt was also cited as a positive.
The Sheet asked Holler if the rating change would ironically serve to encourage the town to add long-term debt in the form of an ice rink or new administrative office building.
Holler pointed out that the town plans to leverage Measure R dollars, not General Fund dollars, to borrow against in order to take out a construction bond for an ice rink/multi-use facility.