Amy Dalrymple, Forum News Service, Published February 28 2013
Williston's bond rating loweredWILLISTON, N.D. – Wil-liston city leaders say they’re disappointed by a reduction in the city’s credit rating, but they’re committed to managing their debt responsibly and without putting the burden of the oil boom on local taxpayers.
Standard & Poor’s Rat-ings Services has lowered its long-term rating on Williston’s refunding im-provement bonds from A- to BBB+, calling the out-look “negative.”
“The rating action re-flects our view of the city’s lower-than-projected audit-ed results, projected gen-eral fund deficits through 2013 that we expect to entirely deplete cash re-serves, and the uncertainty regarding the city’s ability to balance its budgets and stabilize operations given growth-related fiscal chal-lenges,” wrote Standard & Poor’s credit analyst Kathryn Clayton.
Mayor Ward Koeser said city leaders are conserva-tive about raising taxes because they don’t want local residents to pay for the needs created by the oil boom, he said.
“We don’t believe our taxpayers should bear the burden of this impact,” Koeser said.
City Auditor John Kau-tzman said Williston had about $46 million in debt at the start of the year and anticipates additional borrowing for the expan-sion of a sewage treatment plant and the city’s share of an airport expansion.
Kautzman said he had a conference call Thursday with the city’s bonding finance agency and offi-cials there did not sound any alarm bells about the credit rating. Moody’s gave the city a similar credit rating in the early 1990s, Kautzman said.
It’s a concern for the city to have to pay higher inter-est rates, but the impact won’t be as severe with the current low interest rates, Koeser said.
In the 1980s, Williston paid about $28 million in “bad debt” as a result of developers who walked away from property after the oil boom went bust, Koeser said.
Williston has identified about $625 million in infra-structure needs, but not all the projects need to be done at once, Kautzman said.
City leaders are hopeful that House Bill 1358, ap-proved Thursday by the House, which directs more oil tax revenue to “hub cities” such as Williston, will be favorably received by the Senate.