...The assignment of the 'AA¡' LRB rating, one notch below Ontario's IDR, reflects the slightly higher degree of optionality of payments subject to appropriation. The 'AA' IDR reflects the city's 'aa' financial resilience, which is based on 'Low' revenue raising and 'Midrange' spending control and the maintenance of reserves between 17.5% and 25% of spending. The IDR also reflects Ontario's 'Strong' population growth and 'Strongest' population size and economic diversification metrics, offset by its 'Weak' demographic and economic strength metrics. Fitch Ratings assesses the city's long-term liability metrics as 'Strong' due to low carrying costs for debt and retiree benefits and moderate liabilities to governmental revenues. The 'AA' POB rating reflects the fact that Fitch's criteria provide for debt backed by an absolute and non-cancellable covenant to appropriate debt service payments to be rated on par with the IDR if the revenues available to make such payments are sufficiently broad...
