LOS ANGELES — Fitch Ratings revised Las Vegas' outlook to stable from negative.
On March 7, Fitch analysts also affirmed AA ratings for Las Vegas on $321.6 million in limited tax obligation bonds and $2.4 million in special improvement district LTGO bonds. The rating agency also affirmed an AA-minus rating on $188.3 million series 2009A and series 2009B certificates of participation.
Analysts cited the city's improved finances and restored structural balance for the improved outlook.
"Steady revenue gains and continued expenditure controls have improved the city's financial prospects, while reserve balances remain adequate despite recent drawdowns for one-time purposes," Fitch said in the report.
Las Vegas remains dependent on tourism and gambling, but has experienced steady growth in most tourism-based indicators after sharp declines during the recession.
Other positives included improvements in the housing market and the resultant boost to taxable assessed valuation.
Home values were 29% above prior year levels in December 2012, according to Zillow.com, and foreclosures are down.
"With home values still at half of pre-recession peaks the city's housing recovery has far to go, but further gains appear likely given continued above-average population and employment growth in combination with low inventory levels, according to the report," Fitch analysts said.
Raters also lauded the city for its strong management team and its efforts to maintain high general fund balances. The city experienced a substantial surplus in fiscal 2013 and ended the year with an unrestricted fund balance at 17.9% of the general fund, according to the report.
The one challenge cited was expenditures for police services, which are provided jointly with Clark County.
"A proposed sales tax increase for public safety failed to receive legislative approval in 2013, resulting in cuts to police services that could prove politically difficult to sustain," according to Fitch analysts.
The city's 8.8% unemployment rate in November 2013 remained well above the national average of 6.6%, Fitch said, but has steadily improved.
