City board gets audit report; Mayor apologizes for loss of Moody’s Bond Rating
Published 4:31 pm Tuesday, December 20, 2022
The Vicksburg Board of Mayor and Aldermen received the city’s audit report for fiscal year 2021 on Tuesday, and the city received an apology from the mayor for the report being late and the city losing its bond rating.
Moody’s Investment Service, a New York-based provider of credit ratings and risk analysis, withdrew the city’s A2 bond rating on Dec. 1 because the audit report, which was expected in June, was late.
The board accepted the report Tuesday after a review of the document by auditor Booker T. Camper and can now share it with Moody’s Investment Service.
“The city is financially strong; the net worth of the city is $122 million as compared to last year’s (2020) $117 million,” Camper said. “Our revenue exceeded expenses by $8 million, which is great. Only two years out of the pandemic and the city of Vicksburg is doing well. The city is well-managed; it’s in the black.”
City Accounting Director Doug Whittington said the city’s general fund had a $12.3 million fund balance and revenue for the general fund was $32.5 million.
“We are in really good condition,” Whittington said.
Mayor George Flaggs Jr. put a cloud over the city’s good financial news.
“As mayor of this city and mayor of this board, it’s unfortunate that I have to be the bearer of bad news,” he said.
Flaggs called the report the greatest information the city could possibly receive, but its timing couldn’t be any worse, referring to the loss of the bond rating.
“And because of that, I think it’s incumbent upon me to apologize to the citizens of Vicksburg and for all those that are responsible for our rating and those that have been affected by our rating, I sincerely apologize,” he said.
“In my 30-something years of politics I’ve never had to apologize for what I’m apologizing for, and that is the timing of this report and the effect of this report on the public, and I hope that the citizens will forgive me for this and that we go forward,” Flaggs said.
He ordered a copy of the report to be sent to Moody’s and to those affected by the report, and “(I) would pray that Moody’s will understand the things that went on and before this rating was denied or withdrawn and pray on the mercy of Moody’s that we can restore this so that we can create a pathway to the future of this city.”
Flaggs said he was apologizing “because it was under my watch, it was under my oversight that I have to take this.”
The mayor also said he would have a different personality in the coming year.
“You can rest assured, 2023 and the rest of my political career won’t be this nice; that goes for everybody who works for the city of Vicksburg.
“I’m going to be different, I intend to be different and I’m going to hold every damn body accountable in this city going forward. I’m not going to take the responsibility for others’ actions that affect my reputation and my career.
Vicksburg was one of five local governments to lose its bond rating, according to Moody’s. The others include Greensboro, Ga.; Lauderdale County, Ala.; Lee County, Ala.; and Winfield, Ala.
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.
The Dec. 1 announcement that Vicksburg lost its bond rating marked the second time in 10 years the city lost its bond rating.
Whittington said the reason for the delay in completing the 2021 audit involved inventory software that crashed in May.
“It had to be restored back to a previous copy of it, which caused us to have to re-enter all of those fixed assets. It was months and months of work that had to be redone,” he said.
Had the software not gone down, he said, the audit would have been ready in June.
Moody’s in February 2012 pulled the city’s Aa3 bond rating, citing insufficient financial information on the city’s creditworthiness because Vicksburg did not have completed 2008, 2009 and 2010 audits. The 2021 audit was about six months behind.
Concerning the timeline for reinstatement of the city’s bond rating, it is at Moody’s discretion. Attempts to contact the bond rating service were unsuccessful as of press time.
Whittington said the city’s bond rating was restored in 2014 after it refunded a 2003 utility bond issue and a 2007 general obligations bond for infrastructure work. The city retained its A2 bond rating in 2015 following a financial review in connection with the city’s application for an $18 million capital improvements bond issue and for subsequent bond issues.