When some residents of Buckhead led an effort to secede from Atlanta and create a municipality of their own, more was at stake than just a fractured city.
Atlanta’s financial stability was on the line, and its elected leaders were worried about a potential drop in the city’s credit rating — a consequential score that signals the city is a safe bet for issuing debt and at low risk for defaulting on that debt.
But Atlanta Mayor Andre Dickens successfully thwarted multiple attempts at Buckhead cityhood and is now celebrating the highest credit score in the city’s history. Fitch Ratings recently upgraded the city’s score from an AA+ to AAA.
“Had the city lost 25% of the city population — had we had a secession from the city — this wouldn’t be possible,” Dickens told The Atlanta Journal-Constitution. “Nobody’s leaving the city, people are trying to come in to the city. That’s important.”
Accreditation and rating agencies are always keeping tabs on local governments like Atlanta. They dig through annual financial reports, monitor how the City Council is handling the budget and are at the table whenever the city looks to issue a bond.
The AAA rating is hard to come by — only about 2% of cities across the nation have earned the rank — and Atlanta officials say that it’s crucial to attract businesses and make infrastructure improvements.
“Coming to Atlanta is a safe bet,” Dickens said. “Agencies that are independent have looked at us and said, our future is bright, we manage things well, we are good stewards of the public trust and a good bet for you to come to and invest in.”
Chief Financial Officer Mohamed Balla said the credit ratings also take into consideration the outlook of the city decades into the future. Atlanta’s diverse business sector, booming population and educated workforce all factor into the score.
“The city’s borrowing power is at the top of the pyramid and we can borrow at lower rates,” Balla said. “That means we could do more projects, we could invest more in infrastructure.”
Last year, the city was able to reach the highest reserve fund balance in its history — more than $240 million in rainy day funds. Balla said he’s counseled lawmakers to invest in projects that increase efficiency like the public safety equipment and facility upgrades.
“There’s no shortage in people telling us to buy things,” Dickens said of the often conflicting spending priorities between elected officials, his administration and even Atlanta’s residents.
“It’s prioritizing those things that are most necessary but also critical for our future,” he said.
Longtime Atlanta City Council member Howard Shook — who recently announced his retirement from public office — has helped shepherd the city through bleak financial positions before. Coming out of the Great Recession in 2008, the city’s rainy day balance had fallen to about $7 million, he said.
“It’s validation of a lot of hard work over a sustained period of time, thoughtful decision making — discipline,” Shook said. “When I came in, the city’s finances were in terrible shape.”
“What Fitch told everyone was, ‘if Atlanta was a stock you’d be buying,’” he added.
