Local governments have a lot of headaches these days. Revenues are drying up. Officials are forced to make painful cuts to services, programs and staffs. The public urges government to cut more, then reacts angrily when their favorite programs get the ax. Maintaining financial and political stability is difficult in such an environment.
As if that weren't enough, local governments around the country are being visited by bond ratings agencies and getting new "grades" from those agencies to reflect their creditworthiness. It is not surprising that those reviews are under way, since many local governments have rising debt, falling reserves and thinning revenue streams.
Clearwater got such a visit recently. The three bond rating agencies that wanted a measure of the city's financial health were Standard & Poor's, Moody's and Fitch. The agencies wanted to determine the city's creditworthiness, or how likely it would be to default on bond payments.
The agencies took a hard look at the city's finances, questioned employees and toured city facilities, including the water and sewer plants, Beach Walk and the downtown redevelopment area.
When it was over, two of the three agencies concluded the city deserved to keep its "A" rating — not the highest rating available, but quite good for a local government in this economy.
City officials were thrilled when the third agency upgraded the city's rating to AA-minus, which is even better than "A."
Why does this matter? Because when the city issues bonds to finance public projects, its high rating means it will get low interest rates. That can save the taxpayers millions of dollars.
Clearwater city government, like governments at all levels, often gets accused of reckless spending. However, the bond ratings Clearwater received indicate that it responsibly manages its money and debt and is holding its own in this tough economic environment.
That is performance that ought to be praised.