Sound financial management is paramount in our village’s approach to improve services and amenities through responsive local government. I’m pleased to share a recent independent affirmation of our success in prudent stewardship of your tax dollars.
The rating agencies assign to our municipal bonds is a report card on our financial health, and Pinecrest is earning top marks. Our consistently conservative and responsible course was rewarded recently with Fitch Ratings upgrades: the 2011 B revenue bond series was upgraded to ‘AA+’ and our IDR (Issue Default Rating) given to the highest possible rating of ‘AAA.’ Factors cited for our high marks include the village’s “notably low” property tax rate, management’s flexibility to adjust labor and program costs and “very low” long-term liability burden.
Fitch’s report made particular mention of the village’s healthy reserve levels, currently around $6.2 million, which have been maintained far in excess of official policy guidance. In other words, we are savers. We accrue cash and prefer to use that cash in conjunction with modest and careful bond issuance to make capital improvements. In the past 20 years, the village has had eight bond issues, although three were refinancing for more favorable rates.
I think it’s important to review some of the key contributions to quality of life in our village that have been financed by these municipal bonds. It’s now hard to imagine lovely Greer Park was once a mobile home community. The nearest public library branch was in South Miami. We didn’t have the bustling activity hub that is our Community Center that brings us together with a convenient fitness facility, music, art, language and other classes, and robust programs for toddlers to seniors. Bonds also allowed us to build the Municipal Center housing our police and administrative offices and partially financed the acquisition of Pinecrest Gardens. Rest assured, your council and village management count every penny and strive for a government that works better, costs less and returns maximum value to you.
These ratings upgrades also positively impact any future bond issues, should the need arise for additional capital investment. Just like banks reward individuals with good credit with more choices, lower interest rates and lower carrying-costs because of their history of sound borrowing and reliable money management, good bond ratings rewards the fundamental financial soundness of a municipality.
While the village does not anticipate any additional bond issues in the foreseeable future, it’s important to note that the federal tax exemption municipal bonds have enjoyed since 1913 is threatened by the current administration. This change would be disastrous, raising costs 25-30 percent for municipalities. Municipal bonds have financed building two-thirds of America’s public infrastructure, including 87 percent of public utilities, 65 percent of schools, 54 percent of environmental projects, countless roads and so much more.
I was recently appointed to the National League of Cities’ Finance, Administration and Intergovernmental Relations committee, and preserving the federal tax exemption on municipal bonds is a major area of focus and concern. I will work diligently to protect the option for all local governments to provide critical services and infrastructure to their communities via this vital financing tool.
Municipal bonds have allowed us to enhance our village for the benefit of all residents. It’s a pleasure to see our fiscal responsibility in accomplishing these projects recognized, and I applaud our staff and previous councils. I am proud to serve my neighbors and friends in an efficient and responsive municipal government which embraces the highest standards of public service.