Recently, letters have been published in the Review from people questioning the management of Lake Oswego's finances by city officials and staff. The fact is that the city is in extremely sound financial condition, as demonstrated by Aaa/AAA bond ratings from Moody's Investors Service and Standard and Poor's Ratings Services, respectively. This highest rating from two bond rating agencies establishes Lake Oswego as one of a small and elite group of communities across the nation. Such ratings are only bestowed on cities deemed to maintain the highest standards of financial management and prudence.

The role that these New York-based rating agencies play in the capital markets is critical. Their ratings provide investors and other market participants around the country with an independent benchmark by which the bonds sold by a community can be measured against other investment options. A higher credit rating means lower risk to investors, which means those investors are willing to accept lower interest rates for investing in those securities. Consequently, by securing the highest possible ratings, city officials and staff are providing a benefit to Lake Oswego residents in the form of lower interest costs on the city's bonds, which means lower tax rates to city residents.

The sale of bonds is an important financial tool for all levels of government. Lake Oswego has only utilized bond issues for long-lasting public assets, which is both prudent and fair.

A city can no more be expected to pay for long-term capital improvements with current cash than a family would be expected to pay cash for a new home. Spreading the costs of acquiring long-term improvements over the life of those improvements ensures that all benefiting citizens pay their fair share. If a 30-year asset were paid for with cash today, individuals moving into the community the next week would derive the benefit without bearing any of the costs. Bonds are an excellent means of ensuring generational equity.

There is no question that the city is facing significant capital spending needs in the next several years, both as a result of aging infrastructure and new initiatives. Selling bonds to finance capital improvements is an investment in the city's quality of life. It is not 'deficit spending' as implied by a recent letter to the Review.

Reasonable people may disagree about the city's capital priorities, but we should all appreciate that the city's finances are being managed to provide Lake Oswego residents with the lowest financing costs available.

Lawrence W. 'Chip' Pierce is a Lake Oswego resident associated with Western Financial Group, LLC.

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