Ten years ago, the City of Clinton was a million dollars in debt.
Today, they have more than $8 million sitting in the bank.
“It started in 2011, when we restructured and refinanced our debt,” said city manager Roger Houck. “We issued new debt, which was mainly to get out of the hole and fund some capital outlay projects.”
Houck came to the city as manager in 2010. One of the first things he did was hire Gail Cook as finance director.
Houck met Cook when she came from MTAS to help him hire a finance director.
“She helped us during the interview process,” Houck said. “After four or five applicants, I realized who I wanted, and that was Gail. That was one of the top three things I did as city manager.”
In March of last year, Moody Investors assigned the city an A1 rating, which is the highest rating the city has had in 15 years.
“That shows the city has a very strong financial position now, and a very low debt burden,” Houck explained.
Since 2010, the city has hired six firemen, four patrol officers and three school resource officers. At the end of 2010, there was only $733 thousand in operating money.
“Today, we have a little over $7 million,” Houck said. “That’s from a combination of conservative budgeting and not overestimating revenue. We went for a three year period of not doing a lot of capital projects.”
Since then though, the city has been able to do more than $8 million in capital projects, and have been able to pay cash for all those (except for a fire truck).
A big chunk of that $8 million paid for paving.
The debt that was restructured — as well as the new debt that was taken on — will all be paid off in seven years, if all goes according to plan. That’s a big accomplishment for a city that has the lowest tax rate in the county.
Having $8 million sitting in the bank is nice, but it’s also insurance. Some economics predict another recession, and if that happens, it’s comforting to have that cushion, Houck said.
Conservative budgeting has played a part, but Cook says it’s also because the city’s tax base has grown. Not only has residential development increased, but industrial development has given the city a big financial boost.
“We’ve had the industries that have expanded,” she explained, “and when they expand, that increases our tax base.”
The city has only had one tax increase, and that was three or four years ago, according to Houck. That increase was needed to open a new EMS station behind city hall.
“When we did that tax increase, homeowners’ insurance actually went down,” Houck said, “so it was a win-win.”
For the third year in a row, the city will receive the Government Finance Officer’s Certificate of Achievement for excellence in financial reporting.
“That speaks very highly,” Houck said.
2011 was the first year since 2001 that the city did not borrow money to operate, saving around $60,000 a year in interest alone.
And while the city has been saving money, it has spent more than $8 million on projects like renovations to Jaycee Park, a splash pad at Lakefront Park, renovations to the community center ball park, public works equipment, renovations to the fire stations and reopening another, renovations to city hall to make it ADA compliant and police cruisers. The use of grants has also helped keep costs down.