Under a proposed resolution from Mayor George Flaggs Jr. the Board of Mayor and Aldermen would be prohibited from reducing the city’s fund balance below 25 percent of the budgeted expenses set in the city’s budget.
Flaggs said the move is part of the city’s plan to get its bond rating back. Moody’s Investment Services, a New York-based provider of credit ratings and risk analysis, pulled the city’s A-1 bond rating in February 2012. Getting that rating restored was one of Flaggs’ goals when he was campaigning for the mayor’s office in 2013.
“What we’re doing is setting the example for future administrations, whoever it is,” Flaggs said. “We’re setting a precedent. If a board wants to spend more money, they’ll have to rescind the resolution.”
The resolution shows potential developers and businesses that the city is serious about being fiscally responsible.
He said the resolution was influenced by his years in the Legislature on the finance and banking committees. After serving 26 years in the state House, Flaggs retired from the Legislature in June after his election as mayor.
Until Vicksburg is re-evaluated and given a rating, it will continue to be hamstrung without the ability to borrow money or refinance loans, a common practice among state and local governments to finance large projects — from expanding public works infrastructure to major road improvements.
The revenue a city collects is rarely enough to get the job done today, and officials must turn to loans or bond issues to make ends meet.
Vicksburg for is just like an individual with bad credit. Banks and bond agencies have been afraid to lend the city money, fearing the risk is too high.
The re-rating exercise itself, is expected to cost taxpayers $9,500.
We say that’s inexcusable. It’s kind of like paying an overdraft fee at a bank — take care of business, avoid the penalties.
It’s also inexcusable for a city the size of Vicksburg to go two years with no bond rating.
Like any responsible individual, the only way to receive a high credit rating is to pay the bills and perform basic fiscal duties in a timely manner. Anything less is unacceptable, especially when it’s taxpayers’ money.
“We’re in an area that can be affected by storms and floods,” Flaggs said, “and you have to have money for those emergencies. You can’t operate a city on the edge of your finances. You have to keep a fund balance. It’s just a good business practice.”
Vicksburg is making good fiscal management one of its highest priorities. And residents should expect that and accept nothing less.