Moody’s: Vicksburg has ‘solid economy’

Published 8:00 pm Monday, November 19, 2018

An annual report by Moody’s Investor Services shows Vicksburg’s financial position is strong, Mayor George Flaggs Jr. said Monday.

Moody’s Investment Services is a New York-based provider of credit ratings and risk analysis that gave the city an A2 bond rating in 2015 and renewed in June 2018.

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“Moody’s issued its annual comments on Vicksburg and mentioned it has a solid economy, and more capital and stronger than the United States median,” Flaggs said before Monday’s meeting of the Board of Mayor and Aldermen. “We’re doing good in terms of Moody Investments.

“At last count, we were above 50 percent, almost, on (the ratio of) fund balance compared to operating revenue. We’re on track and running this city like a business.”

Bond ratings are used to determine a borrower’s ability to pay off a loan or bond issue. The ratings go from AAA to C, with AAA being the highest and best rating and C the lowest. Moody’s rating service also has a “WR” designation, which means the rating has been withdrawn.

An A2 rating means the city has more than a sufficient financial ability to pay off the loan.

When cities file for a bond rating, they are required to provide continuous financial information to the rating service, such as audit reports.

Bond rating services use the information to determine if the municipality will keep its rating. Most bond issues are for 20 years. The service wants to know that the city will be able to continue paying the debt service. If the city fails to provide continuous and timely information, it can have its bond rating reduced or removed.

The city lost its bond rating in 2012 because it fell behind in annual audits and could not to provide Moody’s with current, accurate financial information.

Sound credit for city

According to the Moody report, the city has a sound credit position, with notable credit factors including a “very healthy financial position, sizable tax base, a moderate tax burden.”

The report indicated the city had an inflated pension liability, which it said was the result of the state’s pension contribution rates, and has a weak wealth and income profile.

Vicksburg’s financial, however, is “robust,” according to the report, and its fund balance to operating revenues ratio is above the U.S. median, although its cash balance as a percent of its operating revenue is lower than the U.S. median, while its economically its full value per capita is stronger than the U.S. median.

In another matter, Flaggs said the city has met its projected revenue of $2.2 million from the special 2 percent sales tax on food, beverage, hotel and motel rentals for the 2018 fiscal year.

Voters in July 2017 approved the special tax to support the construction of the Sports Force Parks on the Mississippi sports complex being built on Fisher Ferry Road.

According to a chart provided by the city’s accounting department, the city received $2.22 million in revenue from the special tax, with $342,651.98 collected in September, which was the close of the 2018 fiscal year.

“Our local economy is growing and thriving,” Flaggs said. 

About John Surratt

John Surratt is a graduate of Louisiana State University with a degree in general studies. He has worked as an editor, reporter and photographer for newspapers in Louisiana, Mississippi and Alabama. He has been a member of The Vicksburg Post staff since 2011 and covers city government. He and his wife attend St. Paul Catholic Church and he is a member of the Port City Kiwanis Club.

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