AP NEWS

Ratings agencies offer a warning about charter changes, and voters should listen

August 2, 2018

For the ninth time in a row, the city of San Antonio has received triple-A bond ratings from the three major credit-reporting agencies — saving taxpayers millions in borrowing costs.

But the high marks this year came with warnings for voters. The proposed charter changes from the San Antonio Professional Firefighters Association could be detrimental to the city’s financial health.

The fire union, which for years has refused to negotiate a new contract with the city, has successfully placed three proposed charter changes on the fall ballot that represent a wrecking ball for city government. Two of the ratings agencies explicitly agree.

“Successful passage of these petitions … would lead to negative rating pressure should the city be unable to effectuate effective responses,” Fitch wrote.

Standard & Poor’s warned “if voters approve the proposed changes to the city’s charter … we believe the changes to the referendum process in particular could have a material negative impact on the city’s finances, as such initiatives could effectively limit San Antonio’s ability to manage its budget.”

The first charter change would limit any future city manager’s salary to 10 times the lowest-paid employee at the city and cap the city manager’s tenure to eight years. Note: it would not apply to City Manager Sheryl Sculley. Another would give the fire union the sole right to declare an impasse in contract negotiations, forcing the city to binding arbitration. The third proposal would reduce the number of signatures needed for a referendum from 75,000 to 20,000 and allow for referendums on appropriations, taxes and utility rates.

These are serious warnings from experts. Voters should listen.

AP RADIO
Update hourly