City’s superior bond rating bodes well for future
Published 3:53 am Saturday, February 14, 2009
As reported in last Tuesday’s Daily News, the city of Washington’s bond rating has been upgraded from A- to A.
The upgrade was made by Standard &Poor’s, a bond-rating agency. According to city officials, a bond rating is an independent judgment of a city’s financial stability. Councilman Archie Jennings, who is in the banking industry, noted the increase is “a direct result of our reserves increasing.”
Given the nation’s horrid economy, that is particularly good news, and it bodes well for future endeavors. The higher the bond grade, the lower interest the city pays on money it borrows.
In December, the city learned its general fund balance increased by $632,132 from fiscal year 2006-07 through fiscal year 2007-08, closing at $8,569,052 as of June 30.
But now comes the hard part: keeping the A bond rating, and determining how to use the increased fund balance. The balance represents accumulated city savings, not recurring revenues, explained City Manager James C. Smith.
And that’s the challenge.
Some of the reserve surplus will be used to pay down debts or set aside for specific projects, programs and to purchase equipment. That type of advance planning will be critical as the city maneuvers through the economic quagmire the country faces.
The upgraded bond rating, though, sends a signal that the city is on the right track, and for that we say “congratulations, and keep it up.”