Giving Louisville's mayor the credit he deserves
- October 31st, 2010 8:41 pm ET
Credit where credit is due...
Photo: McAdam/ImageChef
We like to think we are among the harshest critics of Louisville’s Metro Mayor, Jerry Abramson. We take seriously the old adage that it is a reporter’s job “to comfort the afflicted, and to afflict the comfortable.” But when one of Mayor Jerry’s frequent accomplishments comes to light, we are obliged to acknowledge his success.
Municipal finance and bond ratings are probably not high on most readers’ list of interesting topics, but believe us when we tell you that there is no more important indicator of city government competency than Wall Street’s estimate of a town’s credit-worthiness. Louisville’s ability to borrow money at a reasonable rate to finance needed capital improvement projects is vital to its economic success, and is directly related to the administration’s skill at managing a tight budget.
It was therefore exciting to learn of Mayor Abramson’s announcement last Thursday, that Louisville Metro Government has among the nation’s best credit ratings for city governments, based on reports just released by the top three Wall Street credit rating agencies. Standard and Poor’s Rating Services, Fitch Ratings and Moody’s Investors Services assigned the top ratings as part of Abramson’s $41 million bond refinancing that will save the city more than $2.5 million in interest payments.
“Most cities in America would love to have the kind of top-flight ratings that Louisville has earned,” Abramson said. “It’s a clear reflection of the strong fiscal management of our government and the diversity of our local economy that has allowed us to weather the economic storm better than most regions of the country.”
The bond refinancing conducted this week is part of the Abramson administration’s on-going efforts to run government more efficiently and effectively. In the past eight years, Abramson has reduced the size of the government workforce by nearly 20 percent while maintaining and expanding the city’s core services. Fitch Ratings praised the city’s management in its AAA rating – the agency’s highest. “Financial performance has been generally stable, benefiting from strong management and solid economic growth,” Fitch wrote.
Moody’s Investor Services cited the Abramson administration’s “strong budget management” in awarding its second-highest rating, Aa1. Moody’s cited stable outlooks for several major employers, which affect the city’s occupational tax collections, as reason for a positive regional outlook in the midst of a slow national economic recovery.
Standard and Poor’s Rating Services gave Louisville Metro Government a AA+, its second-highest rating, citing “strong financial operations guided by strong management policies” as a key factor.
The agencies cited many positives in the local economy that makes Louisville stand out including:
- Deep, diverse economic base
- Continued population growth
- Above-average wealth
- Low debt-burden for city government
The rating agencies noted reason for optimism based on job expansion plans by local manufacturers including Ford Motor Co. and General Electric. Moody’s cited the city’s low costs and the presence of University of Louisville as a large research university as reasons to expect future economic growth.
The city’s fantastic credit rating is the result of a great deal of hard work by Mayor Abramson and his staff. Particular credit should be given to Chief Financial Officer Jane Driskell, who directs Louisville’s Office of Management and Budget; and to Bruce Traughber, who directs the city’s Economic Development Department. Excellent municipal bond ratings are not the stuff of front-page headlines and awards ceremonies, but they have a direct and positive effect upon every citizen of our community.