September 15, 2009 10:18 AM
We just got our bond rating yesterday, and we continue to be one of only a handful of municipalities in the country with the best bond rating possible, Aaa. I was happy and relieved to see that because Dane County lost its Aaa rating last week and in this environment, anything is possible.
One of the reasons that we continue to enjoy this high rating is that we budget conservatively, generally budgeting for revenues that come in higher than expected and expenses that come in lower than we budget for. That's good for two reasons. First, in years like this one it helps cushion the blow. For the first time in recent memory the City of Madison, despite its conservative budgeting, will actually finish the year needing to draw on its long term savings account.
That brings me to the second reason that our conservative budgeting is good: we have a long-term savings account to fall back on. We have that rainy day fund because of all those previous years (including my six years in office) of careful budgeting. In fact, that savings account (the technical name is the "fund balance") is almost $30 million. By contrast the State of Wisconsin keeps no fund balance at all and Dane County's relatively small balance will have been wiped out by the current recession, part of the reason for the decline in their bond rating.
What all this means for taxpayers is that we will get the very best rates possible when we go out to borrow for street repair, fire stations, libraries, parks and all the infrastructure investments we do as a city.