Fair is fair. If a dip in the city’s bond rating is news and political ammo for Memphis City Council members, then a rise in the bond rating is also news.
Within the last two weeks, two ratings agencies (Fitch Ratings and Standard & Poor’s) boosted their outlook on Memphis debt to “positive” and gave Memphis a grade of “A”. Not headline-making stuff these days but worth noting. Last year, the rating was lowered due to a $25 million general-fund operating deficit. Some saw that as an indication of general decline throughout the city and incompetence at City Hall.
The reports cite such things as a significant operating surplus, improved general-fund balance, central business-district redevelopment, increased property tax values, and a diverse economy led by FedEx.
On a down note, there’s some gibberish which appears to be either skepticism or hedging on the part of the rating agencies. Standard & Poor’s, for example, writes that “offsetting factors include the city’s significant historical deterioration in its financial performance and general-fund position,” while Fitch “remains concerned that the expenditure reductions may be difficult to sustain over a longer term” and that income levels are still lower than the state average while unemployment is higher.
So what does it mean? One, a property tax next year is unlikely. Two, criticism of the Herenton administration as fiscally irresponsible will be harder to make. And, three, the proposed annexation of two suburban areas with a total of 35,000 residents will probably be put off for at least a year, if not longer, on the “leave well enough alone” theory.
Anyway, the mayor, the finance directors, and the City Council did their job. Memphis is out of the financial fires for the time being, and that’s good.
A New Ball game
This Friday marks the date when the current owners of the Memphis Grizzlies will have to match an offer from an out-of-town group seeking to buy the team. This is, in the most literal sense of the phrase, a big deal.
Many questions are still unanswered, including some that are quite basic: For example, just who else is in the group headed by former Duke players Brian Davis and Christian Laettner? How solid is their financing? And most important, how “basketball smart” are they? Disturbing reports emerged about the group’s intentions to cut back payroll and possibly put the Grizzlies’ only true star, Pau Gasol, on the trading block. Coming from the same bunch that early on suggested with a straight face that Laettner would come out of retirement and play for the Grizzlies, there is ample reason for concern.
A lot of Memphians worked very hard to get the city its first major-league franchise. Now that we’ve built an arena and a playoff team, we need to work equally hard to make sure the new owners have what it takes to play ball in the big leagues.
