Bond Ratings Better in Cities Where Life is Well Run

The value of professional management in local government has once again been borne out in hard numbers, indicating a strong correlation between non-political, executive-style management and the financial health and stability of these communities. These numbers also serve to elevate and validate the profession of city/county manager and its role in creating a Life, Well…

BLOG POST | Aug 4, 2016

The value of professional management in local government has once again been borne out in hard numbers, indicating a strong correlation between non-political, executive-style management and the financial health and stability of these communities. These numbers also serve to elevate and validate the profession of city/county manager and its role in creating a Life, Well Run in the communities they serve.

In a recent ICMA review, two-thirds (66%) of the cities that received a Moody’s Aaa rating employ a professional manager, proving once again that communities in which officials hire a highly trained, nonpolitical chief executive to oversee operations are more fiscally efficient and credit worthy. That number is up fom 61% in 2009.

“The good news about the important role of professional management in ensuring a community’s creditworthiness comes as no surprise to ICMA,” says ICMA (International City/County Management Association) Executive Director, Bob O’Neill. “The findings support what ICMA members and supporters have known all along: that professional local government management and the council-manager form of government—which combines strong political leadership and effective management capacity—makes an important difference in the quality of life for the residents in those communities that employ it.”

hilton head

Hilton Head, SC has a triple a bond rating according to Moody’s.

Moody’s established its system of rating securities to provide investors with a simple method of evaluating the “future relative creditworthiness” of securities. Obligations, such as municipal bonds, that are rated Aaa are “judged to be of the highest quality, subject to the lowest level of credit risk,” according to the company’s Rating System and Definitions.

These new findings reinforce the results of a similar review of Moody’s conducted in 2009 and a 2011 operations efficiency benchmarking study, “Smarter, Faster, Cheaper,” published by IBM Global Business Services. This study found that cities that operate under the council-manager form of government and thus, have a professional local government manager, are nearly 10 percent more efficient than those that operate under the mayor-council form.

For more information about the council-manager form of government, visit the Council-Manager Form Resource Package. Visit Life, Well Run to learn more about the profession of local government manager.


ICMA Blog


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