The Center for Priority Based Budgeting (CPBB) is a proud partner with the Town of Garner, NC. The Town was one of the first communities we worked with in North Carolina.
CPBB partnered with Garner during the Town's 2013-2014 fiscal year. During this time,
The Town of Garner's prudent work in instituting strong fiscal policy and practices has paid off in multiple ways. One of these ways is in the form of a strong credit rating.
According to a recent Town of Garner News Release (Credit Rating Affirms Garner's Economic Strength), "Standard & Poor's Ratings Services has assigned it's "AA+" credit rating to the Town of Garner's 2015 general obligation (GO) bonds and affirmed that same rating to the Town's outstanding GO bonds. S&P also said the Town's outlook is stable.
S&P said its rating reflected the Town's strengths in numerous areas including 1) budget flexibility, with reserves in excess of 75% of general fund reserves; 2) budgetary performance, with surpluses in each of the past three fiscal years and 3) liquidity, with very strong cash to cover debt service and expenditures. S&P also cited the Town's "good financial policies" and "very strong institutional framework."
"We are very happy with S&P's most recent credit rating," Town Manager Hardin Watkins said. "Great things are happening in Garner, and it is refreshing to see external analysts confirm and acknowledge the hard work done by our outstanding elected officials and staff team."
At the Center for Priority Based Budgeting, we've been extremely interested for some time in how
credit rating agencies (CRA's) would evaluate the Fiscal Health and Priority Based
Budgeting (PBB) efforts of the communities we're working with. Our core concepts of fiscal health and priority based budgeting have proven to ensure that local governments are clear and transparent about what truly is their economic reality. Communicating that picture simply, clearly, and understandably without volumes of numbers, spreadsheets, tables, and an
endless series of charts is frankly a challenge that has plagued
managers for years. If managers are going to be able to demonstrate
financial reality internally to elected officials and staff, and
externally to CRA's and residents, they have to find better ways to make fiscal
situations understandable and transparent to everyone.
Finding
creative, clear, and nontechnical ways to demonstrate what the next five
to 10 years might look like is a must if people are going to address
fiscal concerns. All too often, local governments are unable to make
sound, timely decisions regarding investing in new resources, starting
new programs, or initiating major capital projects because elected
officials, local government managers, and staff members are paralyzed by
the uncertainty of whether they actually have enough money to
appropriate for these purposes. Developing a long-term financial
forecast is key to gaining a better understanding of what the future
might hold.
How CRA's assess municipal bond ratings for a community has a tremendous impact on the communities ability to borrow. A municipal bond is a bond
issued by a local government, or their agencies. Potential issuers of
municipal bonds include states, cities, counties, redevelopment
agencies, special-purpose districts, school districts,
public utility districts, publicly owned airports and seaports, and any
other governmental entity (or group of governments) at or below the
state level. Municipal bonds may be general obligations of the issuer or
secured by specified revenues.
Municipal bonds are securities that are issued for the purpose of
financing the infrastructure needs of the issuing municipality. These
needs vary greatly but can include schools, streets and highways,
bridges, hospitals, public housing, sewer and water systems, power
utilities, and various public projects.
Communities are seeking every possible means to prevent downgrades in their ratings (and simultaneously increase ratings).
And the credit rating agencies are facing immense pressure to
substantiate the ratings they report - strong or weak. We've been
keeping a close eye on this as we better understand how the CRA's
perceive how fiscal health and priority based budgeting can provide evidence that a
community is taking a sustainable and responsible approach to resource
allocation, basing decisions on the long-term health of the community in
light of its values and priorities. Click here for more on credit rating CPBB case studies.
The CPBB congratulates the Town of Garner's leadership and staff for their excellent work! Way to go Garner!
If you're thinking of jumping into the world of Fiscal Health and Wellness through Priority Based Budgeting we would certainly like to be part of your efforts! Contact us to schedule a free webinar and identify the best CPBB service option(s) to meet your organization's particular needs.
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