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Rossford is very strong financially and should be able to pay for planned street and intersection improvements without weakening that position, a city consultant has reported.
The outlook contained in an analysis by Standard & Poor’s Rating Services gave the city its highest credit rating. The rating upgrade — to AAA — means Rossford will pay less to borrow money for the projects, should it decide to do so. How much less will depend on credit market conditions at the time.
The S&P analysis lauded Rossford’s financial management and assigned its AAA rating to the city’s general obligation and various purpose improvement and refunding bonds. The AAA rating means Rossford has “an extremely strong capacity to meet its financial commitments,” according to S&P’s definition of its ratings categories. The city has a debt of $3.55 million.
“In our view, Rossford’s management conditions are very strong, with strong financial practices under our Financial Management Assessment methodology, indicating practices are, in our opinion, strong, well-embedded, and likely sustainable,” the report stated.
Rossford has been deferring street maintenance and plans to begin work on resurfacing, reconstruction, and intersection improvements in the summer, City Administrator Ed Ciecka said.
City officials estimate they’ll spend more than $2 million on improvements, including on Hillside Drive, which will be rebuilt with a storm sewer after the Northwestern Water and Sewer District installs a new sanitary sewer and water line.
Rossford’s debt was previously rated AA-, a relatively strong rating, but the minus sign meant its relative standing was toward the bottom of that category.
At last week’s council meeting, Council President Larry Oberdorf said much of the credit for the upgrade went to Administrator Ed Ciecka and Finance Director Karen Freeman “for the guidance they gave us.”
Mr. Ciecka explained that the city had lowered its debt level and kept its expenses under control. He said it also benefited from being in Wood County, which has a AAA rating as well. “It’s something to be proud of,” he said.
Ms. Freeman noted that Rossford had experienced slow revenue growth but that S&P was impressed with the city’s reserves.
Indeed, the S&P report noted that Rossford had available reserves equal to 207 percent of operating income in fiscal year 2012 and that this fund balance “is expected to remain above 30 percent, which we feel is a credit strength.” The city’s surplus for all of its funds was 29.9 percent in FY 2012 and 19.7 percent for its general fund, according to the report.
“In our opinion, very strong liquidity supports Rossford’s finances, with total governmental available cash at 159 percent of total fund expenditures” and equal to more than 29 times debt service, the report reads.
In S&P’s opinion, Rossford’s economy is strong, with a $55,100 per capita market value for its real estate. Santo Baretta, S&P’s primary credit analyst for the evaluation, told The Blade this was one measure of a community’s wealth.
The S&P report states that Rossford’s per capita after-tax income was 121 percent of the national average. S&P said it expected the city to spend down its reserves for the planned street projects, but that it believed the reserves would not dip “below levels we consider to be very strong.”