While earning an A3 bond rating may prove the City of Rockingham does an effective job managing its resources, doing a good job can work against you, some city officials say.

A conversation between Mayor Gene McLaurin, Councilman Steve Morris and City Manager Monty Crump illustrated the point Tuesday night, when they discussed the fact that because the city manages its debt well and keeps the cost of municipal services like sewer and water low, the city misses out on some opportunities for grants.

The exchange came when Morris offered his response after Crump informed the council that the city maintained a stable bond rating while maintaining a relatively low rate for taxes, water and sewer.

“If I read some of your reports correctly, we may not qualify for grants because our water rates are too low,” Morris said.

Crump explained the formula the state uses to give out utility grants would require the city to double its rates, which the city has determined would be counter-productive.

“Throughout the years, we’ve probably gotten as good or better private placement financing through some of the loans that have been available through the years,” he said.

“What some of these grantors are saying is ‘You’re doing too good of a job, so we’re not going to give you any money,’” Morris said, at another point in the conversation.

“That was one of our problems with our COPS funding this year, having our financial rating,” Crump replied. “We’re not rolling in dough, we don’t have millions of dollars in the bank, it’s how we manage what we have. That’s been an issue with the COPS, that’s been an issue with some of the fire department grants.”

Police Chief Robert Voorhees then entered the conversation.

“And we’re penalized for lowering our crime rates, if we’d have actually had a higher crime rate, we’d have a better chance at getting money,” he said.

Crump presented the city council with a financial rating review for the city from Moody’s Investor Service in New York City, which assessed the city to have solid investment-grade bond rating.

The last review came in 2001, when the city also received an A3 rating.

“During the last year you’ve seen a lot of local governments, I think even the state of North Carolina, have their bond ratings downgraded, and we’ve been able to maintain our A3 bond rating,” Crump told the council.

An A3 rating means the city’s debt can be sold directly on the market without having to buy insurance.

“This report was very favorable to the financial strategies of the City of Rockingham,” he said.

The report was discussed in an article in the Daily Journal Weekender edition last weekend.

In essence, it means the city has proven itself trustworthy to take out loans and pay back its debts.

Councilman John Hutchinson expressed satisfaction with the report’s assessment that the city will grow its tax base by about $25 million in the upcoming year.

“In a year when we had a declining economy, nationally and statewide, it really struck me that the City of Rockingham is expected to grow its tax base next year from $610 million to $635 million,” Hutchinson said. “That’s a great growth in our tax base here, and that I think can really be attributed to the great work that Monty and John Massey together have done as our city manager and city planning director.”

In other business:

n The city council honored the Bronco All Star little league baseball team that came within one game of going to the Bronco League World Series in California after capturing the Southeast Regional Championship.

That regional tournament was hosted in Rockingham.

Members of the team and the coaches received lapels bearing the insignia of the city.

“This was an experience you will remember for the rest of your lives,” Mayor Gene McLaurin told them. “And you were ambassadors for the City of Rockingham. You were representing us, you were representing our community. You were representing your parents, and you were representing those of us up here on Rockingham City Council and we appreciate the work you did.”

n Crump updated the council on the project to widen an aeration basin at the city’s wastewater treatment plant to accommodate the industrial needs of von Drehle Corporation.

At last month’s meeting, he told the council there was a dispute with a sub-contractor over the cost of the project.

“We’ve gotten those issues resolved,” he said. “I was able to submit a facility pay request, and get the contractor paid. I think everything’s in good shape there. They came around to the city’s line of thinking in the disagreement we had over the quantities of the removal of sludge.”

n Three outgoing citizen board members were honored for their service on municipal boards.

Honored were Ed Ormsby for his service on the Board of Directors of the Rockingham Housing Authority, Malcolm McLester for his service on the Rockingham Historic Preservation Board and Doug Fulford for his service on Planning and Perimeter Committee.

“One of the things that helps Rockingham run effectively is to have citizens involved,” McLaurin said.

He also pointed out the leadership of Ormsby during a tenuous year as the chair of the RHA board.

“The true test of leadership is whether an organization is better off when you leave it than when you began,” he said. “That is certainly the case here.”

n Several appointments were made to the Historic Preservation board and the RHA board.

The mayoral appointment of former Councilman Joe Mendola to the RHA board was made official. It was previously covered by the Daily Journal.