City of Moberly is receiving financial guidance
Updated On: Oct 08 2013 06:11:29 PM CDT
The city of Moberly is seeking financial guidance to help restore its credit rating.
Currently, the city's credit rating is at a B.
Two years ago, an artificial sweetener plant was supposed to open in Moberly. It cost the city nearly $40 million in bonds. The Mamtek plant never opened, and the city is still picking up those pieces.
Mamtek's bonds are currently at a D rating, and the reason for a financial adviser.
The city manager, Andrew Morris, said the credit counseling has been in the process for months now. However, it was just announced Monday night at the council meeting who the financial adviser will be: Piper Jaffray.
The city hopes this asset management firm will help the city move forward so something like Mamtek will not happen again.
"You can't overlook the fact that there is still that influence of the Mamtek rate being a D, which presents challenges for us moving forward if we were going to get a bond issue," said Morris.
This is a challenge Morris and the city's director of finance understands will take time to cure, and in fact might never disappear.
However, getting outside financial advice is a step they are taking right now.
"We knew going into it there is no such thing as a silver bullet, and that there wasn't a magical formula to lay down that suddenly that D rating on the Mamtek bonds would go away," said Morris.
Piper Jaffray, the financial adviser chosen out of six other firms, will meet with Morris next week. They plan to talk about capital budgeting, fund balance and the ability to attract investors.
"The alternative was to do nothing. Just wait and see if this passes or engage in a number of lawsuits which is not something the council wants to do," said Morris.
The cost to the city for the financial adviser is $1,500.
The city plans on working with them for the next few months. As for the credit rating, they do not expect it to shoot up after these meetings, but hopes it will have long-term positive effects.
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