PETERSBURG, Va. – Petersburg leadership announced that the city’s credit outlook has been increased by the Standard and Poor’s (S&P) Rating Services.
The beleaguered city of Petersburg has made headlines for months as leaders deal with the windfall of debt load in the millions, but the city’s credit rating change could be a significant mile marker in their roadmap to fiscal recovery.
The boost to a ‘stable’ outlook gives the city the ability to borrow money at a lower interest rate.
The city has made significant efforts to gain better financial footing after a change in leadership, a forensic audit and state police investigation.
The Robert Bobb Group, an interim management team was put in place to lead the city through the rough time.
“This enhanced outlook is proof positive that the city has taken numerous, significant steps down the road to fiscal recovery,” Bobb said. “This is a reflection of the collective efforts of the Mayor, City Council and staff in getting to this turning point.”
Two days ago, the new Petersburg city manager Aretha Ferrell-Benavides said that the city’s top priority is good fiscal management and that she had dug in to work hard for the future of the beleaguered city.
“We know that we are at an inflection point and we have to demonstrate that we can follow through on the groundwork that the Robert Bobb Group’s Team provided,” Ferrell-Benavides said. “Our ability to repay our debts, maintain structural balance and rebuild a fund balance in FY 2018 and beyond will be instrumental to future rating upgrades.”
"Although this news is the best news we have had recently, we still have a lot of hard work to do,” said Mayor Sam Parham.
Some called the S & P revision within nine months an unprecedented move.
"The outlook change from negative to stable signifies that we are moving in the right direction,” said Nelsie Birch, a fiscal consultant
"We cannot divert from the financial policies and plan that has been set and we must continue the discipline that it will take to get us back to where we do not have to live paycheck to paycheck."
The change comes as the city prepares to sell $3 million in bonds on August 10, to pay for new fire trucks and police cars.
In an 11 page report, S & P listed their view of the city's credit quality as having a weak economy, historically very weak management, very weak budgetary performance, very weak liquidity and strong debt. But a recent visit by representatives of the S& P and an underwriting company changed the outlook.
"When Standard and Poors saw what was going on in Petersburg, they were surprised,” Parham said.
"I think that was incredibly valuable for them to see this is a city that has opportunity,” Birch said.