City earns ‘A’ in finance

Published 12:00 am Wednesday, November 2, 2011

The City of Andalusia has improved its “grade” in finance.

Standard and Poors assigned an “A” rating for the City of Andalusia for its 2011 bond issue, an improvement from the “A-“ assigned for its $6 million 2009 bond issue.

The rating agency cited the city’s “stable economic base,” and “historically strong finances, supported by, what we consider, steady sales tax collections and good financial practices.”

The council Tuesday approved the 2011 bond issue refinancing $8.75 million in existing debts at a lower interest rate.

Standard & Poor’s revised Andalusia’s Financial Management Assessment (FMA) to “good” from “stable” due to management’s formal adoption of key investment, debt management, and reserve policies. An FMA of “good” indicates financial practices exist in most areas but that governance officials might not formalize or regularly monitor all of them. Key practices include management’s:

· Providing monthly budget updates to the city council;

· Formal investment policy that follows state guidelines and requires quarterly reporting to the council;

· Formal debt management policy that follows state guidelines;

· Formal reserve requirement to maintain a minimum $500,000 in a restricted reserve account that requires council approval before use; and

· Review of its capital projects list.

“This affirms to our citizens that we have instituted fundamentally sound financial practices and continue to work to stretch our resources in order to provide the best possible services to our citizens as efficiently as possible,” Mayor Earl Johnson said. “We have consistently demonstrated to Standard & Poors that we have worked to increase efficiency through a variety of means and have strengthened our economy by investing in infrastructure during a time when much of the rest of the world has been bogged down in economic turmoil. We have taken advantage of historic low interest rates and construction costs. They have praised us for this investment and have indicated that we have positioned ourselves to reap dividends in the future. They are also impressed that we have diversified our economy and that we have maintained a stable retail hub and growing medical community.”