9.1. SR 01-21-2014 - Laserfiche WebLink

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Public Sector Advisors ® springsted Springsted Letter Inside This Edition... Credit Rating Agencies Revise Criteria for Operational Finance Group General Obligation Bonds Ways to Get to Know the After months of review,Standard&Poor's(S&P)implemented their new criteria for Financial Health of Your general obligation(GO)debt last month. Moody's has released their proposed GO Communit PAG F criteria. Both agencies emphasize that the main reason for their new criteria is to y provide transparency regarding the factors,scoring and weighting used to determine the rating. However,the respective scoring systems are modified through this process Executive View and may result in rating changes when employed. Building and Giving Back S&P indicates that,based on preliminary research,they expect 60%of GO ratings to to Communities. . .. . . . . . . . . . stay the same;30%to be upgraded and 10%to be downgraded. S&P uses a scale of 1 to 5 to score seven categories,(shown below),and can further adjust each score by qualitative assessments. The new methodology focuses more acutely on operations, Mid-Atlantic and Organizational debt and liquidity for all governmental funds. Management/Human Resources Groups Weighting of S&P Credit Factors The Growing Need for Succession Planning. . .. . .. . .PAGE Institutional Framework Organizational Management/ Economy Human Resources Group Management Turning Uncertainty and Obstacles into Confidence Budget Performance and Opportunities . .. . . .. . . ..PAGE Budget Flexibility Springsted Investment Advisors Liquidity The Changing Role of the U.S.Federal Reserve. . .. .°r Debt/Pensions 0% 10% 20% 30% Public Education Group What are the key considerations? Strategies to Delight and Cash is king. Liquidity is measured against expenses for all governmental funds Exceed Expectations: 30-Day and also compared to total governmental debt service. In the past,unassigned Callback Strategy . . . .. . . .. . .PAGE 5 balance in the general fund was compared to general fund budgets. • Debt compared to total governmental revenues and also debt service compared to Housing&Economic total governmental expenditures is scored. Net debt below 3%of full market value Development Group /o and retirement of 65 of principal in less than 10 years improves the score. Managing Increased Economic The Institutional Framework and Management are S&P's two management assessments. In addition to financial practices,they now score predictability, Development Activity . . . .. . .PAGE 6 structural balance,transparency,accountability and system support for Management scores. • Budgetary Flexibility and By Terri Y.Heaton Performance measure fund balance across governmental funds and annual Senior Vice President performance of the general fund. and Client Representative-9 (Expenditures in special purpose theaton @springsted.com Article continues on Page 2 NOVEMBER 2013 Expertise. Insight. Accomplishment.