Dec 19 2017

Credit Agencies Praise St. Louis County’s Fiscal Management and $100 Million Reserve

The latest report from one of the nation’s premier credit rating agencies praises St. Louis County government for budgetary management that has produced cash reserves in excess of $100 million.

The Standard and Poor’s (S&P) Financial Services LLC report, issued on Nov. 6, commends County government, under the leadership of County Executive Steve Stenger, for its “strong budgetary performance,” “very strong budgetary flexibility,” and “very strong liquidity.”

The report noted the County’s cash reserves of over $100 million, or 32 percent of operating expenditures, was more than double the recommended governmental “best practices” reserve range of 5 to 15 percent.

“I am pleased that S&P recognizes St. Louis County’s excellent financial health,” County Executive Stenger said. “It is especially important to me as a Certified Public Accountant and attorney that this research-based report compiled by financial experts validates the prudent stewardship of taxpayer dollars that has been my priority as County Executive and, before that, as a two-term member of the County Council.”

When County Executive Stenger took office in 2015, he inherited a budget in such shambles that the previous administration had tried to sell off County parks to remain solvent. (As a member of the County Council, Mr. Stenger led the fight that stopped the sale of the parks.)

Upon taking office in 2015, the County Executive, drawing on his accounting background, ordered a top-to-bottom forensic audit that identified waste and cost-saving opportunities.

The Stenger administration then began making budget cuts, both large and small, including:
 Closing a little-used print shop for an annual savings of $300,000.
 Closing the Lakeside Center and contracting with the Catholic Charities group Marygrove to carry on its services, saving taxpayers another $2.1 million per year.
 Securing a contract for food services at the County jail with a new company for $600,000 more in savings every year.
 Consolidating dental services in the Health Department to produce more than $1 million in annual savings.
 Creating a new pension plan that will save the County about $30 million in the next 10
years and $300 million in the next 30 years.
 And eliminating positions through attrition and reviewing all open positions.

While the County maintained its strong AA+ rating with S&P, it also received plaudits from two other prominent national credit rating agencies, Moody’s Investors Service and Fitch Ratings. In awarding its AAA rating, Moody’s cited the County’s “well-managed financial operations supported by ample reserves and favorable cash margin.” Fitch’s AAA bond rating report made
note of County government’s “strong revenue and expenditure frameworks and a low long-term liability burden.”

St. Louis County is, in fact, the only county in the state of Missouri to receive an AAA bond rating. This distinguished status is awarded to less than 8 percent of governmental organizations in the United States.

The recent report by S&P also pointed to the overall “strong” economy of St. Louis County, exemplified by “recent economic development projects in the county, including significant new job growth and expansion of manufacturing, retail and commercial real estate firms.”

Since last year, major corporations have invested $4 billion in capital improvements and expansions in the County. These investments generated about 5,700 new jobs and retained about 21,000 more.

“St. Louis County government, like the County itself, is in solid financial shape,” County Executive Stenger said. “We have put measures in place to assure that our government will continue to live within its means while supplying the excellent services that our residents have come to expect. And we are not going to raise taxes to do so.”

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