Compliance Assistance

Once the team has determined the capital asset requirements and calculated the corresponding costs of the project, that information should be analyzed in relation to the community’s overall projects and financial commitments. Questions that might be helpful include:

• What are the community's revenue sources?
• What is the community's debt capacity?
• What other projects does the community need to fund in the near term?
• Are there policies that aid or impede the project?
• Can multiple projects be done at the same time to reduce the overall cost of all projects?

There are three main municipal credit-rating agencies

• Standard & Poor's
• Moody's
• Fitch

These agencies conduct a financial risk analysis by reviewing a city's financial documents. The ratings are then used by potential investors to estimate the credit worthiness of a specific city or city sector. The lower the rating the higher the cost of borrowing. The 2002 article from Standard & Poor's details this further "Top 10 Ways to Improve or Maintain a Municipal Credit Rating." (PDF) (5 pp, 33K, About PDF)

Once the team and municipal officials understand the project costs, benefits and municipal impacts, the team can review alternative finance mechanisms to fill the funding gap.

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Next Step: Select Financing Options

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