City Hall’s financial acumen feted
September 25, 2009
City Hall has received upgrades in its bond ratings from two top-ranking firms, awards, the firms say, for the municipal government’s sound fiscal policies and Park City’s standing as a wealthy community with a solid tourism industry.
Park City officials are likely especially pleased with the timing of the upgrades, coming just a few months after difficult budget negotiations as Mayor Dana Williams and the Park City Council crafted a spending plan amid the recession. There were across-the-board cuts in the budget, the deepest in years.
The upgrades in the bond ratings, an official said, could save City Hall hundreds of thousands of dollars as it issues $24 million in bonds to fund waterworks projects like a pipeline to the Rockport Reservoir and water-treatment plants.
According to a report submitted to the elected officials recently, Moody’s Investors Service gave City Hall a rating of Aa3. Bret Howser, City Hall’s budget officer, said the rating is a two-grade improvement from one given to Park City in 1994 for the same category of bond. Meanwhile, Standard & Poor’s issued a rating of AA. The firm has not been asked to rate the same category of bonds since at least 1994.
The report said the higher ratings are "extremely important" to City Hall. They "influence demand and therefore the interest cost that the City will pay for the bonds," the report said.
Howser said the higher ratings resulted in the municipal government not needing to purchase insurance on the bonds. That, he said, likely saved between $200,000 and $300,000. He said there remains a possibility of saving an additional few hundred thousand dollars by paying a lower interest rate on the bonds.
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"It might be one of the primary representations of the financial strength" of City Hall, Howser said.
In the report to the elected officials, Howser indicated Standard & Poor’s was especially bullish on City Hall. A summary of the firm’s comments included that Park City has "very strong wealth levels of the city’s full-time population." The commentary also touches on Park City’s "role as an affluent year-round resort destination" close to Salt Lake City’s wider economy.
The comments also praise City Hall’s financial acumen and the amount of cash that is on hand. Standard & Poor’s said City Hall has a "stable outlook" and "strong financial management."
The comments from Standard & Poor’s, which also included a statement that Park City has a "diverse customer base" even as the tourism industry dominates the economy, reflect long-held strategies of Park City officials. They have had a crucial role in an expansion of the tourism industry that has boosted the numbers during the important ski season and added significantly to those in the summer, now a money-making period in its own right.
City Hall has for years taken pride in its financial management, collecting awards for its budget and keeping property-tax rates stable. Many officials count the condition of City Hall’s finances as being one of the top accomplishments of City Hall.