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City manager reports Moody's downgrade; council urged to prioritize reserves and staffing
Summary
City Manager reported Moody's lowered the city's bond rating citing low reserves, negative fund balances in some funds and staff transitions; council previously boosted reserves with CARES funds and a utility-rate increase, but the manager said a multi-year plan and staffing stability are needed to regain stronger ratings.
In the city manager's report, staff told the council that Moody's Investors Service downgraded Mount Pleasant's bond rating following review of the FY2023 audit.
The manager said Moody's noted eroded reserves across several funds and negative balances in some specialized funds, and flagged uncertainty created by recent turnover in the city-manager and finance-director positions. The manager explained council decisions that aimed to stabilize finances, including placing CARES-designated funds into reserves and the council's prior decision to increase utility rates to improve enterprise fund metrics.
Staff outlined that restoring healthy reserves and eliminating negative fund balances will require a multi-year plan, likely two to three years of fiscal management, targeted revenue and expense decisions, and filling key leadership posts in finance and the city manager's office. Moody's downgrade could increase borrowing costs if the city issues new debt.
Council members acknowledged the concern and discussed prioritization of dam and infrastructure projects within the broader financial context; staff said further budget and reserve planning will be brought to council for review.
