Last month, the Arizona Republic reported Standard & Poors downgraded the bonds of a West Valley community to BBB+. The same article noted “Scottsdale, with a AAA rating, leads the metro area.”
AAA…what’s the big deal? Since I led the team that protected our AAA rating through the recession, let me tell you how and why we need to jealously protect this coveted rating.
Bond ratings affect more than our city’s ability to borrow money; higher ratings mean we pay lower interest rates. In turn, that means preserve tax revenues will finance more land; bed-tax receipts will pay for more tourism projects.
But it’s more than just financial. People who choose to live in Scottsdale and businesses that choose to relocate here inferfrom our bond ratings a financial discipline will permeate the way we do business. “AAA” implies no financial surprises down the road.
How do we guard against losing Scottsdale’s premier AAA rating? Rating agencies give us the answer. S&P’s first concern for that West Valley community was quoted from their report; “…analysts cited weak management…” In August last year Moody’s also expressed “…concern about weak management.”
The most important responsibility of elected leaders is to spend taxpayer money wisely and in the best interest of citizens. And that includes showing financial leadership to vigorously protect our AAA rating. Here’s my concern: to insure we don’t jeopardize our AAA rating, we need to change some of our behaviors of recent years:
Adopt and adhere to financial policies.
- If financing a project requires a waiver of financial policies, it’s a good sign the project is not being promoted transparently and probably shouldn’t be done without voters’ approval.
Don’t “kick the can down the road,” putting off for tomorrow what should be done today.
- Take responsibility for dealing with the depreciation of physical assets of the city. Lead every effort to make sure citizens understand and support the financial needs of our city.
Don’t ignore future financial obligations.
- Don’t ignore looming financial crises like employee pensions. If the state legislature and the judiciary won’t fix the problem, then lead a grass-roots taxpayer initiative to do so.
We can pursue great visions for our city and still manage our financial affairs in a responsible manner. I will use my years of senior financial management experience in private and public enterprises to make good financial decisions that protect our AAA rating as our most valuable financial asset. That’s why I ask for your vote and your support in the upcoming Council elections.