Standard & Poor’s Rating Services issued an “A” rating for the City of Andalusia’s finances this week.
The rating jumped two notches from the most recently-issued rating, a BBB+, to an “A,” and changed the outlook from stable from positive.
“This was harder than ever to earn, because Standard & Poor in the past two years has strengthened and tightened it’s rating system,” Mayor Earl Johnson said. “It was harder to get this ‘A’ than a previous ‘A-’.”
The city sought the new rating in preparation of a bond issue to fund its portion of debt at the South Alabama Regional Airport. The debt was shared with the City of Opp and with the county, and the three entities have worked for months with the South Alabama Regional Airport Authority to refinance the debt. The city’s portion is $8.9 million.
The city also is refunding a 2009 series bond, without extending the terms, which will produce $500,000 in cash. The mayor said this will go into the city’s reserves. The Series B bonds to be issued total $6.44 million, and a portion will be used on the city’s existing debt for interest rate savings, with approximately $2 million going toward downtown redevelopment projects, according to the S&P report.
“We base the upgrade on structural changes the city has made that have significantly bolstered revenues and the city’s budgetary flexibility,” S&P wrote in its rationale for the new rating. “
Johnson said the improved rating boils down to four things.
“We increased our revenue,” he said. “We reduced our expenses. We increased our reserves to more than 15 percent of our gross budget needs, and we reduced the principal of our long-term debt for $4.3 million in the last three years.
“And we’ve done all of that in a weak economy, as defined by Standard and Poor’s,” he said.
The S&P report states, “We consider Andalusia’s economy weak … The city has a projected per capita effective buying income of 75.2 percent of the national level and per capita market value of $65,165. Overall, the city’s market value was stable over the past year at $596.3 million in 2015.”
The report also states that management has met its informal target of maintaining 15 percent of annual operating expenditures in reserve, and says the city has a “strong budgetary performance.”
The report also praises steps taken by the city to increase revenue, namely a sales tax increase implemented in August 2013.
“This is a red-letter day in Andalusia, Ala.,” the mayor said. “It’s more than just a good credit rating. It means the health of your operation is good when you have an A rating.
“This is made possible by the support of the city council, and our great staff,” the mayor said. “And the people of Andalusia who have supported us while we do this. We’re going to be a better city for it.”
The new bonds are expected to be executed in the next month.
Andalusia Star News
By: Michele Gerlach
Andalusia Star News
The Andalusia City County on Tuesday gave the go-ahead for paving portions of 14 roads.
At the recommendation of Andalusia Director of Public Works Glynn Ralls, the council rejected the only bid it received for a proposed paving project, and agreed to negotiate with Wiregrass Construction to finalize a paving plan.
Ralls said Wiregrass has contracts with several counties throughout the state, which allow municipalities in those counties to purchase paving at those contract prices.
Ralls estimated the city would save $50,000 by going this route to complete the now-estimated $518,000 project.
Streets on the list to be paved include:
• Thru Street
• Albritton Road
• South Cotton from West Watson to the railroad.
• Packer Street
• Hillcrest from the Bypass to Snowden
• Hillcrest from the Bypass to the county engineer’s office
• South Cotton Street from Feagin to Whatley Street
• East Pass
• Elm Street
• Grider Street
• Old Antioch
• Coffee Street
• Second Avenue
• Cadiz Extension
• Midway Drive
By Michele Gerlach
Andalusia Star News
Mayor Earl Johnson said Friday was a “red letter day” for Andalusia, even if the reason it was special was all about being in the black.
The city council met Friday afternoon to receive its final audit for FYE 2015 from Ken Odom of Rabren, Odom, Pierce and Hayes, PC.
“Your net cash reserve (or cash in the general fund) increased $3.8 million in 2015,” Odom said. “The change in the fund balance was $5 million.”
Odom said the $1.2 million difference in those two numbers reflects a reduction in accounts payable.
The audit only had one finding, and its one nearly every government agency receives, Odom said.
GASBY 68 in the Governmental Accounting Standards Board, based in Norwalk, Conn., he explained.
“From a financial reporting standpoint, they don’t see any difference between Andalusia and New York City. To them, government is government, and they think every government should have a person on staff who has the ability to prepare this financial statement.
“I don’t agree with them, but that’s what they stay,” Odom said. “There is nobody currently on your staff to do this, nor do you want to pay to get someone. It’s not a cost savings to do so.”
As a result, that must be recorded in the financial statement, he said.
“As a general comment, I can tell you that the city of Andalusia is in a best financial position it has been in a long time,” Odom said. “It’s been in good financial position all along. The increase in the cash, the increase in fund balance, and the fact that those translate in the open market for those who understand these statements, and is continuing – is because of the increase in sales tax revenue. Going forward, I anticipate you will continue to be in that position.”
Year over year, Johnson said, sales tax collections in Andalusia for January 2016 were up 26 percent over the same period last year.
Article By: Michele Gerlach
Andalusia Star News
Mayor Earl Johnson said Friday was a “red letter day” for Andalusia, even if the reason it was special was all about being in the black.
The city council met Friday afternoon to receive its final audit for FYE 2015 from Ken Odom of Rabren, Odom, Pierce and Hayes, PC.
“Your net cash reserve (or cash in the general fund) increased $3.8 million in 2015,” Odom said. “The change in the fund balance was $5 million.”
Odom said the $1.2 million difference in those two numbers reflects a reduction in accounts payable.
The audit only had one finding, and its one nearly every government agency receives, Odom said.
GASBY 68 in the Governmental Accounting Standards Board, based in Norwalk, Conn., he explained.
“From a financial reporting standpoint, they don’t see any difference between Andalusia and New York City. To them, government is government, and they think every government should have a person on staff who has the ability to prepare this financial statement.
“I don’t agree with them, but that’s what they stay,” Odom said. “There is nobody currently on your staff to do this, nor do you want to pay to get someone. It’s not a cost savings to do so.”
As a result, that must be recorded in the financial statement, he said.
“As a general comment, I can tell you that the city of Andalusia is in a best financial position it has been in a long time,” Odom said. “It’s been in good financial position all along. The increase in the cash, the increase in fund balance, and the fact that those translate in the open market for those who understand these statements, and is continuing – is because of the increase in sales tax revenue. Going forward, I anticipate you will continue to be in that position.”
Year over year, Johnson said, sales tax collections in Andalusia for January 2016 were up 26 percent over the same period last year.
The Alabama Aviation Center, a unit of Enterprise State Community College, is considering reopening its instructional site in Andalusia.
AAC in Andalusia was housed at the airport and has an outstanding facility to house classes in the airframe portion of the Airframe and Power plant program.
The AAC did not offer Andalusia in the current academic year, but offered classes to traditional and dual-enrollment students for several years.
AAC recruiter Jenna Judah said the school would love to have 25 to 30 students enrolled in the Andalusia program.
Dual enrollment could.... Read this entire article on AndalusiaStarNews.com
Andalusia Star News
The Andalusia City Council got a preview of its audit for fiscal year 2015 Tuesday, and will hold a special meeting at 1 p.m. this Fri., March 18, to approve the audit.
The council also:
• agreed to provide $1,500 in funding for the Junior Rodeo Association State Finals, slated for the Covington Center Arena in June. The county also is providing $1,500 in funding.
• Appointed Allen Woodard and Mike Holloway to the Planning Commission.