January 19, 2010

Moody's Investors Services...Global Credit Research--10 Nov 2009

EXCERPTS FORM THE REPORT:

.........Moody's Investors Service has assigned a Aa1 rating to the City of Strongsville's (OH) $7 million General Obligation (Limited Tax) Street Imporvement Bonds, Series 2009. Concurretly, Moody's has affirmed the Aa1 rating on the city's $61.9 million of post-general obligation debt. Secured by the city's general obligation limited tax pledge.....

.....The city's tax base has grown at a modest 2% annually over the past five years, although growth is partially tempered by the state's phase-out of personal tangible property valuation. Resident wealth levels exceed state levels, with per capita and median family income at 141.5% and 153.8% of state levels, respectively.

.......Moody's expects the city's financial position will remain sound over the near term due to.........and extension of the tax credit reduction for residents working outside of the city.....

INSIGHT:  During the review of the 2010 budget there was no discussion of the cost facing the city if Moody's Rating drops from the Aa1 rating. While no elected official has said so it would appear that the city, its services, and citizens are now the "prisoner" of $61.9 million of outstanding general obligation debt, including the $7 million general obligation bonds for the Pearl Road widening.  The vast majority of this debt was requested by the Administration and approved by City Council since 1/1/2004.