Vicksburg on the right track

Published 7:00 pm Tuesday, November 20, 2018

The Board of Mayor and Aldermen’s fiscally conservative approach to handling the city’s finances has received a strong endorsement by one of the country’s major investment and credit services.

Moody’s Investment Services, 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, released its annual comments on the city’s finances, saying it has a solid economy, with more capital and stronger than the United States median for other cities with the same bond rating.

“We’re doing good in terms of Moody Investments,” Mayor George Flaggs Jr. said.

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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 picture, 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 economically its full value per capita is stronger than the U.S. median.

The Moody’s report is important for two reasons. First, it comes from a neutral observer. Second, as a bond rating service, it keeps track of the city’s financial activity, using information like the city’s annual audit reports, which gives city leaders and services like Moody’s a close look at Vicksburg’s complete financial picture.

Vicksburg’s financial picture has improved over the past five years, starting with overcoming an estimated $400,000 deficit in 2013 to having a $3 million reserve fund. The mayor’s insistence that department heads set their budgets at 97 percent of the previous year has made them think more about budget needs than wants.

The board’s decision to keep a tight rein on expenses has help the city make it through some difficult economic times when some other cities have struggled.

The Moody report is a strong statement that the board’s economic policies are moving Vicksburg in the right direction. There may still be fiscal areas that need improving, but if the city continues on the road it’s going, those problems will soon be eliminated.