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posted by Barry at
Barry:One clarification on something you said last night about the City's fund balance: 12 percent is not a "target." The City's policy states that the fund balance should be maintained between 12 and 15 percent, so 12 percent is actually a floor.Therefore, the vote to reduce the balance to 11 percent drops the fund below that floor. Let's all hope that poor decision will not be repeated for fiscal year 09-10.Mike "Not one of the 11 percenters" Woodard
By Mike Woodard, at 2:19 PM
thanks, Mike.question - if the fund balance does in fact result in a lowering of the AAA bond rating that Durham enjoys, how easy is it to restore that rating?In other words, if the fund balance is brought back up to the desired level, will the rating upgrade automatically and promptly follow? And if the city has borrowed funds at the higher rate as a result, will they be refinanced at the lower rate?
By Barry, at 2:38 PM
Not an easy question to answer. A number of factors go into determining a city or county's bond rating, and The state of the fund balance is just one of them. Nothing is "automatic" about its determination. None of the criteria exist in a vacuum, so one can't honestly say that a drop to 11 percent loses the bond rating this year and increasing it to 12 percent next year gains it back.
By Mike Woodard, at 4:35 PM
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