Standard & Poor’s last week revised the outlook to stable from negative on Atlanta’s general obligation debt and appropriation-backed bonds issued on behalf of the city by various issuers.
The agency affirmed its A rating on the city’s GO bonds and on the Atlanta and Fulton County Recreation Authority’s GO and appropriation-backed debt.
“The outlook revision reflects our view of the city’s measures to eliminate its general fund structural imbalance, curtail its future pension obligation growth, and improve its cash flow,” said analyst Le T. Quach.
Atlanta’s financial position improved during fiscal 2010 and 2011, “but some challenges remain with respect to external negative fund balances and a high general-fund receivables balance,” Quach said.
At the end of fiscal 2011, the city’s cash and cash equivalents, including pooled cash, totaled $63 million, or 52 days’ cash on hand.
Atlanta’s adopted fiscal 2012 budget is 2% less than its fiscal 2011 budget. Based on actual general fund results through Jan. 31, the city’s revenues are largely in line with the same period last year, and general fund expenditures are about $17 million lower year-over-year, Quach said.
“The city is pleased that Standard & Poor’s has recognized our efforts toward a more secure financial position and structurally balanced general fund operations,” said Atlanta chief financial officer Jim Beard. “Strong cost control and conservative revenue projections have allowed the city to benefit from multi-year savings through robust fiscal management.”
The city’s reserve of $94 million is more than 15% of the general fund, Beard said. The city’s goal is to build reserves to more than $100 million, he added.