City of Ferris receives AA- Bond Rating
FERRIS – The City of Ferris received a “AA-” long-term rating last month by S&P Global Ratings, which is the largest and most respected of the “Big Three” credit rating agencies.
The agency noted Ferris had a strong budgetary performance with revenue growth outpacing expenditures, leading to available reserves doubling over the past three years; good financial management policies and practices, and strong institutional framework; very strong budget flexibility with available reserves 62.6% of operating expenditures; and a very strong liquidity with total cash 108.1% of governmental fund expenditures.
Ferris City Manager Brooks Williams commented on the financial improvements of the city: “Goal six in our strategic plan is to set the standard for sound governance and fiscal management – you are seeing the fruits of that labor.”
The city has increased cash reserves [fund balances] each of the last three years. The council has a fund balance target of 25% of operating expenditures. The current percentage of 62.6% far exceeds that target. In addition, the days of operating capital exceed the 90-day recommendation of the Government Finance Officers Association (GFOA) Best Practices for Municipal Government.
This improvement in the city’s financial position has been accomplished while increasing employees’ salaries and benefits, increasing investment and infrastructure with $630,191 in 2022, and maintaining a tax rate lower than that of 2018.
Other financial highlights include the assets and deferred outflows of resources of the city, which exceeded liabilities and deferred inflows of resources at the close of the most recent fiscal year by $8,490,997 in its net position. Staff said this amount – $3,146,567 – represents unrestricted net position, which may be used to meet the city’s ongoing obligations to citizens and creditors, in other words, this is the rainy-day fund.
It was also stated that the city’s net position is expected to increase by approximately $500,000 in 2022. Net position over time serves as a useful indicator of a government’s financial strength. In the case of Ferris, the net position has increased by more than $500,000 each year for the past three years and is anticipated to do so again in 2022.
“We have been intentional in our approach to fiscal management, and I have the absolute best CFO anyone could ask for,” Williams concluded. “Ferris is in the best financial position in our history, has a strong fund balance, and we are continuing to look for ways to ensure our financial stability and accountability remains strong.”