DATE: November 17, 2014
TO: Board of Mayor and Aldermen
FROM: Eric Stuckey, City Administrator
Russ Truell, Assistant City Administrator
SUBJECT:
title
Discussion of Peer Cities Analysis for Financial Comparisons.
body
Purpose
The purpose of this memo is to provide information to the Franklin Board of Mayor and Aldermen (BOMA) concerning the cities used for financial comparison in the development of debt capacity modeling, budgeting, and strategic planning.
Background
In April, 2009, the Board of Mayor & Aldermen began deliberation on its first formal debt management policy. The Board undertook the project with the primary goal of maintaining its bond rating (currently a Triple-A rating from both Standard & Poor's and Moody's), which ensures favorable interest rates whenever the City chooses to borrow for capital improvement projects and financial stability for the future. Unlike debt management policies used in other communities, the Franklin policy elected to make debt limits flexible by determining a range for each of five financial benchmarks that are used by the bond rating agencies.
To arrive at those valuations, the first step in the policy development process was to compare the financial statistics of Franklin with other cities. The cities chosen for comparison were similar to Franklin in their bond rating and financial condition, and, to the extent possible, in size and growth parameters. Now, more than five years later, many of the cities used in the 2009 analysis have not developed as extensively or as quickly as the City of Franklin. Others were adversely affected in different degrees by the financial downturn.
Given the time lapse and the changes in city circumstances, it is advisable for BOMA to review the cities currently included and consider making changes to eliminate some existing names and include others where more appropriate comparisons exist. Our financial advisor, Public Financial Manag...
Click here for full text