The negative outlook assignment was given to the cities of Greensboro, along with six of the largest local government borrowers in the state, including Guilford County, the city of Winston-Salem, Mecklenburg County, Wake County, Durham County and New Hanover County.
“We’re not really sure why we’re on the list,” Lusk said. “We don’t think we should be.”
Lusk wrote in a memo to his boss, City Manager Rashad Young, last week:
Within the next 90 days, Moody’s will conduct an assessment of each “AAA” issuer’s vulnerability to macroeconomic sensitivity, market risk and exposure to federal spending reductions, as well as our level of financial reserves. If they determine that we possess characteristics that do not make us vulnerable to a US government downgrade, our outlook will be moved back to stable. Otherwise it will remain negative.
So why were the cities of Charlotte and Raleigh — two of the largest local government borrowers in the state — left off the list.
“We can only surmise it’s because they have larger financial reserves,” Lusk said.
Lusk said the city will be submitting information to Moody’s about HondaJet’s apparent interest in expanding its operation at Piedmont Triad International Airport, along with a recent report by UNCG professor Don Jud indicating an improvement in employment in the Greensboro-High Point area.
Lusk also said the city of Greensboro’s ability to repay its debts is sound. The city paces its borrowing so that debt service comprises no more than 10 percent of its annual budget, and keeps the debt burden below $1,000 per capita. He said the city’s current debt burden is about $800 for every resident. Those are factors Lusk expects to reflect positively on the city during its review.
No comments:
Post a Comment