Financially Strong City
Fiscal health is fundamental to a successful city. A strong balance sheet, ample cash reserves and efficient delivery of services enable Atlanta to invest, grow and expand opportunity for all its citizens. In the wake of the Great Recession, the city has improved its credit rating eight positions to AA+ with the three major ratings agencies, Moody’s, Standard & Poors and Fitch, allowing for bond financing at favorable rates. In addition, under the Reed Administration, the city’s cash reserves (rainy day fund) grew from $7.4 million in January 2010 to more than $175 million.
Maintain the city’s general fund reserves above 20 percent of its operating budget.
Why It Matters
Atlanta must continue to strengthen its balance sheet, improve its expenditure-to-reserve ratio and maintain a well-funded pension plan. It must be prepared to respond to the next economic downturn and unforeseen circumstances, without draining its cash reserves. A robust rainy day fund also allows Atlanta to maintain and improve its AA+ credit status to remain competitive with peer cities such as Austin, Charlotte, Denver and Seattle. A top-tier rating expands Atlanta’s capacity to access credit markets for bond financing and municipal improvement projects that expand growth and opportunity for all citizens.
What It will Take
Maintaining the city’s general fund reserves at above 20 percent of budget will require a Mayor and City Council who wisely manage the city’s revenues and expenditures, prudently oversee the city’s airport and watershed enterprise funds, and develop and approve balanced budgets without imposing undue tax increases on citizens. They must exercise discipline to outpace inflation with cost control and efficiencies in delivery services. In addition, pension costs and investments must be well-managed to sustain pension funding levels, with improved governance. It’s a process that requires strong fiscal management and oversight.