Cosumnes Community Services District, a California special district providing emergency medical, fire protection, parks and recreation services to over 200,000 residents in Elk Grove, Galt and surrounding communities, received a rating of AA- from Standard & Poor Global Ratings (S&P), meaning the district’s capacity to meet its financial commitment is “very strong”.
This rating is an indicator of the district’s capacity to meet its financial obligations and is a strong endorsement to the district’s commitment to the responsible stewardship of public funds. An AA rating is the second highest on the 10-point scale, which ranges from AAA to D. According to S&P, an obligation rated AA differs from the highest-rated obligations “only to a small degree”.
“The affirmation of our positive credit rating is a result of the district’s dedication to accountability, transparency, and financial stability," said Cosumnes Community Services District Board President Jim Luttrell. "It shows the district’s strong financial management is serving us well amid the fiscal impacts of the COVID-19 pandemic."
In their assessment, S&P noted the district’s strong median household and adequate per capita effective buying income, extremely strong property wealth levels, maintenance of very strong available reserves, moderate overall debt burden, and manageable pension and other postemployment benefits (OPEB) obligations.
In addition, the district maintained a fiscal contingency plan since the beginning of the COVID-19 pandemic, which mitigated a larger negative impact to district funds. Through conservative financial mechanisms and risk-adjusted capitalization, the district maintained very strong reserves while providing exceptional services to meet the needs of the community.
The AA- designation was applied to the district’s series 2021 certificates of participation (COPs), which have an estimated value of $8.8 million. The district’s COPs provide an opportunity for investors to purchase a share of the district’s lease revenues, and in turn, the profits will help finance upcoming efficiency projects.
On Sept. 29, the district obtained approximately $10 million from the sale of the 2021 COPs. Proceeds will finance a portion of construction costs for the new Fire Station 77, helping improve emergency response times across the district’s service area.
Sale of the lease revenue COPs will also provide financial support to the district’s long-term sustainability plan for energy efficiency improvements by securing solar panels for the district’s administrative building on Elk Grove Boulevard, thereby supporting the district’s commitment to the Climate Action Plan / Sustainability & Adaption Plan, adopted in October 2020.