The nation’s top two rating agencies have given Toledo a stable credit outlook and have let the city keep its ratings intact, Bell administration officials said Thursday.
“Balancing the budget was a huge part of this,” City Finance Director Patrick McLean said. “They were looking for us to get out from underneath the huge deficit we faced a couple of years ago, and the fact that we were able to come out in the black was a big part of it.”
Standard & Poor’s Ratings Services again gave the city an A- rating with a stable outlook, while Moody’s renewed Toledo's A2 rating with a stable outlook.
“We will continue to have very good, very reasonable rates when we issue our debt. This tells us, compared to where we were in the past, we are moving in the right directions,” Mr. McLean said. “We will hope for an upgrade in the next couple of years.”
Like many communities, Toledo's debt rating was downgraded several years ago, but has started to recover after the $48 million budget deficit the Bell administration addressed in the city’s 2010 general fund.
In 2009, Moody’s had rated Toledo as an A1 with a negative outlook.
Jen Sorgenfrei, spokesman for Mayor Mike Bell, said the agencies recognized the budget adjustments city officials made during the past two years.
“S&P mentioned they recognized the work we had to do in a very short time to stabilize the financial situation in the city compared to the way it was when we took office,” Ms. Sorgenfrei said.
“They realized that we made cuts, they realized that the 3/4 percent [income tax] was renewed, they realized that we addressed staffing issues. But we have consistently not had mass layoffs and consistently hired police and fire.”
Ms. Sorgenfrei also said the two agencies noted that Toledo will have to continue to wean itself from using its capital-improvements budget to balance the budget's operating accounts.
City officials went to Chicago last week and to New York in June to meet with the agencies.
Councilman George Sarantou, chairman of council’s finance committee, said Wall Street has been pleased by the diversification of Toledo's employment opportunities.
“We are maintaining a stable outlook — for years the city of Toledo had a negative outlook and again, Wall Street is seeing a pattern where we are continuing to diversify our employment opportunities for people,” Mr. Sarantou said.
“We have Powertrain and Jeep, but now we also have the casino open and [the agencies] recognize that higher education system is doing well, that the University of Toledo is expanding and doing well, and that the medical community with ProMedica and Mercy, is doing very well and expanding.”