By Rob Yundt & Jodi Taylor

Recently, regional banks in the U.S. and one major international bank have either collapsed, are in crisis, or have been rescued by larger banks due to liquidity issues. Given these financial headwinds, this is a great time to assess the financial viability of the Municipality of Anchorage as voters decide how to vote on the many bonding propositions on the ballot.

In November 2022, Anchorage had its bond rating (credit score) downgraded by Fitch, citing the Muni’s depleted cash reserve levels which were not adequate to cover 10% of the Muni’s current year expenditures in its general fund. That means the Muni was required to have about one month’s annual expenses in cash in order to maintain its rating – it did not.

Later, Fitch updated its rating notes after finding the Muni could borrow up to $640 million in cash.  Basically, it found that the Muni’s liquidity issues were solved because the it had a “credit card” with a $640 million limit. That’s not the kind of financial strength one would hope for, and not how we the voters run our personal finances.

In fact, financial advisors suggest families have 3-6 months of cash on hand. The Muni has less than a month.

Contrast that with the Mat-Su Borough. In 2022, Fitch maintained the borough’s bond rating, although the borough was not seeking to borrow any money. Fitch cited the strong cash reserve position for the rating. The Mat-Su has roughly two month’s annual operating expenses and one year of its annual debt service on hand.

Anchorage and the Mat-Su also differ regarding what type of capital projects they take on, and how they pay for them. For example, Anchorage is asking voters to approve a bond to repair roofs, replace worn out equipment, or rehabilitate a trail – essentially bonding for maintenance, which is a dubious financial position to be in.

Contrast this with the Mat-Su Borough paying $25 million for a new school this year … with cash.

Two years ago, Mat-Su voters approved a roads package – adding roads, not repairing them. Again, the borough paid cash. Mat-Su has increased its school enrollment by 64% in the last 10 years while paying for schools with cash – not bonding.

In addition, the cost of borrowing has increased. The average loan in 2020 was 3.7%, versus the current 7%. The feds just bumped rates a quarter point this week. Any new bonds (debt) added to the Muni would cost about 1.5 times what that same liability would have cost per month in 2020.  Similarly, short term lending to cover monthly expenses, or the $640 million in borrowable cash, also will increase the Muni’s monthly expenses.

Given the problem the Muni has with low cash reserves, and the substantially increased costs of bonding, this is not the time to add more debt. Let’s learn lessons from the banking failures and the Mat-Su’s example of being financially prudent when taking on additional debt.

This is not the right time to add more debt to the Muni monthly expenses. It should wait until the Muni replenishes its cash reserves before taking on anything in the short term.

The views expressed here are those of the authors.

Jodi Taylor is the Board Chair for Alaska Policy Forum. Rob Yundt serves on the Mat-Su Borough Assembly.

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OPINION: Cash-poor Anchorage can’t afford more bonding debt


  • Peyton Randolph says:

    Install a toll booth just for the Valley people who commute into Anchorage and use our roads everyday. Anchorage and non Valley people would be exempt.

    • Friend of Humanity says:

      Peyton, this is a topic that has been thrown out there that starts bickering every time. Lol Well, the Mat-Su Borough folks could put up a toll booth for all of the people that drive from around the state to recreate in the Mat-Su Borough – snowmachining, snowboarding, skiing, lake activities, camping. Wasilla, alone, could make a bunch of toll money off of the traffic that plugs up the Parks Hwy through Wasilla every summer! No, this division is not the answer. Both the Muni and the Borough need better ways to handle the finances.

      • Peyton Randolph says:

        Not only should there be a special toll for those Valley People who use Anchorage resources, there should be an additional fee for those Valley People who feel so inclined to stick their noses into Anchorage’s affairs such as testifying at Assembly meetings. Oh, you want to have a MAGA rally in my town ? Extra fee for you. Trucker protest ? An additional “green” tax for all of those nasty diesel F250’s coking our air. Testify at our assembly meeting ? Maybe, if there’s time at the end of the night, but you go to the back of the line, residents of Anchorage have priority. I for one am tired of hearing the incessant whine of the poor Valley People who don’t like how Anchorage governs itself. Even the author of this blog doesn’t live in Anchorage, does not own property in Anchorage, doesn’t have children in Anchorage schools, nor does he pay a dime in taxes to the Muni, yet he seems to have an oversized voice in our affairs. Just like the Lady from Florida, well, except at least JD lives in Alaska.

        Alaska – Where we don’t care how they do it Outside, except in Tallahassee.

        Make Anchorage Tallahassee Again !

    • Friend of Humanity says:

      Peyton, I think that you would be much happier living in New York City or L.A. California. Anchorage sounds like the most undesirable place; I cannot figure out why you would want to live in that city?

      • Peyton Randolph says:

        My ancestors have lived on this land for thousands of years. Go pound sand.

      • Friend of Humanity says:

        Your ancestors lived on the land for thousands of years that is now Anchorage Alaska?

    • Dee Barbarick says:

      With kind regard to your comment “My ancestors have lived on this land for thousands of years:” Mine have too, and they are all over the planet. My niece had a DNA profile several years ago and found we are nothing “special” other than children of God.

      • Peyton Randolph says:

        Good for you. FoH is suggesting that I move somewhere else. Why should I do that, I was born in Anchorage, this is my home. I know that you’d rather send us all back to the villages, but some of us were actually born here. My parents were born in Alaska as were my grandparents and some of my great grandparents.

      • Friend of Humanity says:

        Peyton, I am not suggesting it. It is just a thought that I threw out there because you just sound so unhappy with Anchorage. I was still curious though about your ancestors because I like Alaskan history. Can you tell me more about these ancestors of yours?

    • Herman Nelson says:

      Actually.. I wanted to do some “guerilla signage” at the Knik River Bridge. Something along the lines of the old Checkpoint Charlie sign from cold war Berlin. On the south bound side, it would read in 4 languages “You are leaving the American Sector”. The North bound side would read “You are entering the American Sector”. Why? because the last two years of the scamdemic, Anchorage has been a communist state. It felt like driving into East Berlin daily. I was waiting for the muni to throw up communist style check points and road blocks to scrutinize vaccination records or turn away people who were doing “nonessential travel”. I still have my critical employee letter stuffed in the visor, in case of the need to satisfy Anchorage’s NKVD unit (APD) wanting to do a shake down.
      Ironic though.. During the scamdemic, the restaurants in the valley were filled by 5:30pm daily. With who..? People from Anchorage that drove out to the free state of Matsu because they wanted a break from the Anchorages draconian “mandates”. During the summer time, camp grounds and the willow side of Hatcher Pass were filled with..? Yep, people from Anchorage with their RV’s, motorcycles, side-by-sides, and 4-wheelers. Wanting to get a break from people like you.

  • chad says:

    With all its assets combined Anchorage is worth around $36 billion total. we had a mayor named Dan Sullivan that left us with a $10 million surplus about 8 years ago. And since we have accumulated around $130 million in debt with the help of the Communist in the assembly and good old Ethan showing his ass Berkowitz.

  • Molly says:

    Jodi, i applaud this information, well said.
    Now to the ASSembly members that want to destroy our city, lets not give them any more monies to waste. We have to pick up the bill once we FINALLY boot them out of office.
    Say no to all bonds, our city must become fiscally responsible.
    They could close half the schools, double the classes, inly teach the essentials and then, when our kids improve their reading and math, we can consider vonds.
    Till then, no bond money for the muni, we are already under water in debt as a city!!

  • Dee Barbarick says:

    Yes indeed. Your comment is much appreciated. My late husband and I paid off our debts after we took the scissors to our credit cards back in the 70s and never looked back. We were in our 20s then and every store credit card was so attractive. Mine is a “simplistic” view, but the City of Anchorage needs to do the same. We are not swimming and drowning in the oil money of the 80s. May God Bless.