Marketing nets a cool $100,000

Howard: Columbia's disciplined fiscal management shows up on the bottom line.

May 03, 2000

WHEN IT STEPS UP to borrow money in the next few days, Columbia's governing authority will do so at a lower interest rate -- and a savings of $100,000.

By courting the green eyeshade types on Wall Street -- hitting them in New York with slides and in Columbia with guided tours -- they won an upgrade in their bond rating.

Two of the prime arbiters of creditworthiness -- Moody's and Fitch -- gave Columbia its first bond rating boost since the early 1990s.

The improved standing can be traced beyond mere dog-and-pony shows, of course. Columbia has pursued an aggressive debt retirement strategy for 15 years. Its budget has had a surplus for 13 years in a row.

Its economic prospects seem bright.

The AA rating awarded by Fitch will produce a savings of as much as $100,000 when the Columbia Association moves on its plan to borrow $16 million.

What does that mean?

Last year, the association spent about $100,000 to make capital improvements at the city's neighborhood centers.

The example comes with a tinge of irony: Columbia's lower rating in earlier years was attributed by one of the rating houses to its tendency to "provide amenities in advance of growth" -- in other words, before there was revenue to pay for them.

Columbia Association's outgoing president, Deborah O. McCarty, credits her predecessor for setting Columbia on a path to achieving the improved status. She deserves recognition for knowing that rating houses do not offer upgrades unless they are asked -- and are then convinced that the increases are merited.

That is particularly true, she observes, because Columbia's unusual governing structure is not something the rating houses deal with every day. Ms. McCarty proved that what Wall Street doesn't know can hurt you at the bottom line.

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