Report: City of Worthington in good financial condition

• City of Worthington

Worthington City Hall (Brian Korthals/Daily Globe)

Talk about it

WORTHINGTON — A report released this week by Standard & Poor’s Rating Services says the city of Worthington is in sound financial condition.

“I think it comes with a lot of hard work,” Worthington City Administrator Craig Clark said. “They look at your strength of your community, your financial health of your community, tax base and is it growing, what kind of things are happening with economic development. We had a real good story to tell there with all the development that’s happened in Worthington as of late.”

S&P gave Worthington the rating of AA-, which means the city has a “very strong capacity to meet financial commitments.”

“It just means that when we go to the bond market, we are able to borrow at more affordable rates and thereby lowering the cost of borrowing to the community and taxpayers,” Clark said.

The city’s rating improved in 2010 and has been able to maintain it since. The difference between the two ratings means substantial savings for the city.

For example, the difference between the two ratings for the sales tax bond for the events center saves the city approximately $46,000. On a bond for street maintenance, the AA- rating saves Worthington approximately $93,000.

S&P looks at a variety of factors to develop the rating.

“They look at sales tax collections, because that’s supported by sales tax revenues,” Clark said. “We’re exceeding expectation for collections on our sales tax; that was a nice strong indicator.”

Another factor is housing within the city.

“There have been a lot of communities suffering with foreclosures and that sort of thing, and we don’t have that happening more than the normal here,” Clark said. “That’s good.”

From a numbers standpoint, Worthington has been able to maintain a high level of financial reserves.

During the past four years, the general fund unreserved balances ranged from 24 to 27 percent. At the end of 2011, Worthington had a balance of $2.1 million, or 27 percent of expenditures.

"We're maintaining strong reserves for the unforeseen," Clark said. "When you go to ask people to borrow money, they want to know they will get paid back and part of that equation is looking at our fund balance reserves. We try to remain consistent with the state auditor as to what they suggest a city maintain so that you can accommodate different stresses and that sort of thing."

From a debt standpoint, the city has a very low level — $1,821 per capita.

“We have a low to moderate level of debt, so we’re not heavily mortgaged or in debt as a city,” Clark said. “We just have real strong fiscal health, both community-wide and specifically for the city of Worthington and governmental operations.”

Overall, Clark looks at the S&P report as good news.

“It’s kind of a pat on the back for the city that we’ve been able to maintain good fiscal management in city operations and that comes from monitoring our budgets,” he said. “It certainly demonstrates a lot of hard work by many people in the city.”

Tags: news, worthington