Improved bond ratings are allowing the Columbus Consolidated Government to refinance a series of bonds, saving taxpayers $12 million over the next 20 years, or about $600,000 a year, according to a release from the city.
Following a recent meeting with city leaders in New York City, Moody’s rating service raised the city’s bond rating – basically the city’s credit rating – from Aa1 to Aa2, Mayor Teresa Tomlinson said in a statement released today. Standard and Poors maintained Columbus’ AA+ rating.
Tomlinson, City Manager Isaiah Hugley and city Finance Director Pam Hodge made the New York trip last month.
The city is refinancing $42.3 million in bonds issued in 1999 and 2003, primarily to fund parking decks on Front Avenue and Bay Avenue and to make improvements to the Trade Center.
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“At a time when cities across the country are being downgraded or being issued negative outlooks, we knew it was important to tell the story of Columbus’ fiscally sound policies, our pension reform, BRAC and our solid growth potential,” Tomlinson said. “I think they were impressed with what they saw and heard. We are very pleased with the ratings and outlook statements.”
The outlook statements from the rating agencies list reasons for the high ratings, but also lists some cautions that could hurt the city’s ratings down the road, Tomlinson said.
Both agencies listed the presence of Fort Benning as an economic stabilizing factor that helps the city. Both also cautioned the city about using general fund reserves and running the risk of dipping below the 60-day reserve level that is considered a benchmark in bond rating.
Both agencies also said below-average income levels of city residents as a potential problem.
“While we are proud of these strong ratings and outlooks, the city will work to improve the city’s financial indicators in hope of continued strong, or possibly upgraded, ratings,” Tomlinson said.