City HallBond woes are inexcusable

Published 11:07 pm Saturday, August 25, 2012

The revelation last week that the City of Vicksburg has been without a bond rating for six months is the result of obvious fiscal mismanagement.

Moody’s Investors Services pulled the bond rating on Feb. 15, questioning the city’s creditworthiness because Vicksburg had not completed its 2008, 2009 and 2010 audits.

The penalty didn’t come to light until the city tried to refinance its balances on two old bond issues. Obviously city officials were embarrassed about the situation, and rightly so.

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Until Vicksburg is re-evaluated and given a rating, it will be hamstrung without the ability to borrow money or refinance loans, a common practice among state and local governments to finance large projects — from expanding public works infrastructure to major road improvements.

The revenue a city collects is rarely enough to get the job done today, and officials must turn to loans or bond issues to make ends meet.

Now Vicksburg is just like an individual with bad credit. Banks and bond agencies are afraid to lend the city money, fearing the risk is too high.

Since the city’s rating was dropped, two of the audits have been completed, likely meaning the city will be rated again.

The re-rating exercise itself, however, is expected to cost taxpayers $9,500, Mayor Paul Winfield says.

We say that’s inexcusable. It’s kind of like paying an overdraft fee at a bank — take care of business, avoid the penalties.

It’s also inexcusable for a city the size of Vicksburg to go six months with no bond rating.

Like any responsible individual, the only way to receive a high credit rating is to pay the bills and perform basic fiscal duties in a timely manner. Anything less is unacceptable, especially when it’s taxpayers’ money.

Vicksburg should make good fiscal management one of its highest priorities. And residents should expect that and accept nothing less.