After months of storms, the sun is not the only thing shining in Richmond today. The City’s top management has recently confirmed that the City’s “cumulative deficit,” estimated at $18 million to $28 million just seven months ago, no longer exists. Just twelve months after we were hit by a fiscal train wreck, the City is once again solvent with a balanced budget, no structural deficit and no cumulative deficit.

Credit goes to the City Council for acting in unison on some tough choices, to the voters for passing a new sales tax, to the public employees for shouldering what amounted to a 10% pay cut, and to new City management leadership.

That doesn’t mean we don’t have huge challenges ahead, but it does mean that we are no longer faced with digging ourselves out of a hole, and our journey is no longer impeded by a mountain of debt. Rebuilding a reserve, rebuilding the City’s infrastructure and restoring services are some of those challenges.

In response to the City's actions to improve and stabilize its financial position, Moody's Investors Service has just upgraded the City's ratings by four notches to Baa2.  We are still waiting to hear from Standard & Poor's regarding their reinstatement of the City's ratings which we anticipate will come in the next couple of days.  If Standard & Poor's follows Moody's lead, then the credit quality of the City's bonds will be "investment grade."  The City will once again be able to access the capital markets for its general financing needs.  In addition, the rating upgrades mean that investors owning the City's bonds will see an increase in their value.