Tuesday, April 23, 2024

Robinson: Withdrawing from mayor’s race

Bill Robinson

After extensive discussions with my family, we have decided it is best, at this time, for me to withdraw from running for Mayor of Flower Mound in the May 2018 election. I appreciate and respect the process of running and the extreme importance of the position, especially due to the many facets and moving pieces the town has to decide upon in the immediate future. But, for personal reasons, I need to discontinue at this time.

Even with this decision, I still plan to stay fully engaged with all aspects of the town. You will continue to see my face and I will continue to communicate my thoughts to the residents of Flower Mound. This election is vital for the town, and it’s extremely important we collectively come together as we progress, rapidly, into the upcoming years to make sure Flower Mound continues to be Flower Mound. As always, my number one goal is, and will always be, economically driven.

With that said, I had one last article before early voting that I feel is key to how our financial status is being evaluated related to the Bond Rating. Below is that information that I wanted to pass along. Again, I thank you all for the opportunities in this process.

Bond Ratings:

One situation I have noticed that causes me concern is the usage, or reliance, on the town’s bond rating as a ‘all encompassing’ determinate of the town’s financial well-being. I have seen this used at town hall meetings, by town council, other candidates running for office and many others throughout town. While a bond rating does serve a purpose, I believe everyone should realize there are many factors to consider and be aware of in order to ensure it’s being used in the proper context.

To begin, I believe it’s key to clearly separate Accounting and Finance in as simple terms as possible in the discussion of bond ratings. Accounting is basically a look back in time and to ‘account’ for everything that has happened. Finance is a look forward or how you can plan and ‘finance’ operations going forward. Having those two separated are key for discussing bond ratings.

So, a bond rating is basically a ‘report card’ for how a borrower has performed. Meaning, how well have they paid money back that was owed. The better they have performed, the higher the rating. There are many other factors: how much debt you have and past/current financial information, but in the end it’s a subjective call by an analyst or group of analysts based upon the aforementioned items. So, bond ratings act like your own personal credit score. How well you have done in the past paying money owed, the higher your credit score will be (again, with other factors included, but this is the gist). Even companies have a D&B Rating, or DUNS rating that work the same way.

So, this is the clear distinction that needs to be made between Accounting and Finance related to bond ratings. When you process a Bond Rating, Credit Score or D&B Rating, you take in to account everything in the past that the municipality, individual or business has done. You see how well they have paid their obligations and how credit worthy they are. You look at their financials, how much money they have, etc. Once you have all of this, you get a rating and it’s used as a guide or an indication of potential future performance, but it’s only based upon historical performance through today. It’s used as an indicator for the future, but not what will happen in the future. So, it’s no guarantee, by any stretch, and only a small piece of the puzzle when determining financial well-being and potential future success.

I’ll give you an example of my concern. When you go to school and complete a semester, you receive a report card. That report card shows your performance for the first semester. For example, let’s say you get all A’s in the first semester. Everyone pats you on the back, you did well, and it’s well deserved to flaunt it. However, all the A’s you received in the first semester have nothing to do with the grades you will get in the second semester. Yes, the first semester is a good indication of how you MAY do in the second semester, but other factors that you didn’t experience in the first semester may impact the grades you may receive in the second semester: maybe harder classes, maybe more extracurricular activities, maybe harder teachers. Or, maybe you got complacent since you received all A’s in the first semester and you don’t try as hard. Whatever reason, things could be different. But what the report card from the first semester showed is that you were a good student and you did well, but that doesn’t guarantee all A’s in the second semester… or any time in the future.

This leads us back to the bond ratings. Yes, the town has a high bond rating. The town should be proud of it and flaunt it. Everything the town has done in the past has lead it to the high bond rating. However, this does not guarantee anything in the future. This does not guarantee what the town is doing right now will equate in to the same bond rating next year or the following. If we don’t put things in place to layout a successful financial future, it’s not guaranteed. The town can’t get complacent and say because it has a high bond rating it is doing everything perfect today. We can’t continue to look backwards and say how well we did. We need to look forward and figure out now how do we maintain and progress in to the future.

As previously mentioned and indicated on the towns audited financials, the total amount owed by the town, by year, for the last six years has been:

2012 – $145 million
2013 – $148 million ($3 million increase from prior year)
2014 – $155 million ($7 million increase from prior year)
2015 – $166 million ($11 million increase from prior year)
2016 – $184 million ($18 million increase from prior year)
2017 – $214 million ($30 million increase from prior year)

I’m not an accountant. While I understand many aspects of it, I am always focused on the future and trying to figure out how we can put things in place now so future years will be as successful as possible. We can’t have an ‘accountant’ mentality. We need to have a ‘finance’ mentality.

Bill Robinson
Flower Mound, TX

CTG Staff
CTG Staff
The Cross Timbers Gazette News Department

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