Bond Rating Agencies Recognize Cuyahoga County's Economic Progress

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Agencies Also Highlight County’s Economic Development Efforts, Efficiencies

CLEVELAND – In reports released this month, three top national bond rating agencies ‐ Moody's, Fitch and Standard and Poor’s ‐reported that Cuyahoga County has strong management practices, continued
strong growth in sales tax receipts, healthy reserve levels and a diverse and improving economic base. The rating agencies also noted the key focus of economic development as a core function of County governance and the dedication of new casino revenue to further enhance ongoing efforts to support local development.

“The new management has been very proactive in taking measures to cut costs by making their government more efficient, and that’s been one strength,” said Standard & Poor’s analyst Carol Hendrickson. Standard and Poor’s report says that Cuyahoga County “will maintain a consistently strong financial position supported by strong management. In spite of declining revenues, management has demonstrated a commitment to making budget adjustments to maintain reserves. Since taking office, the new government has taken measures to create a merit‐based culture, emphasize date‐driven results, and make staff efficiencies.”

Fitch analyst Karen Wagner said: “The new management is very focused on economic development, and they’ve included it as core to the county’s mission.” The Fitch report goes on to say that “management has been proactive in reducing expenses via consolidated and streamlined operations” and “given management’s conservative fiscal and budgeting practices, Fitch expects the county to continue producing strong results and maintaining healthy reserve levels.”

The rating agencies released reports in connection with the first sale of bonds in nearly five years by Cuyahoga County. The bonds, which were issued for sale earlier this week, are a mixture of taxable and tax‐exempt bonds. It is a $101.9 million offering of general obligation bonds. The proceeds from the bonds will be used to reimburse the County for various building and infrastructure improvements that have been made over the past two years and provide funding for newer investments in 2013 and 2014.

The Moody’s opinion states that “the County maintains a variety of strong credit characteristics, including currently sound reserves and strong and proactive fiscal and operational management which was only strengthened by the change in government structure. The county’s increased efforts in economic development are to be commended. We expect these efforts to translate to a healthier economy.”

“Issuing the bonds now, at a time when market rates for municipal general obligation debt continue to be at historic lows, we expect to receive comparably favorable rates on the new and refunding money portions of the bond issue,” said Cuyahoga County Ed FitzGerald. “At the current levels the refunding component of the debt issue will save the County $5 million dollars. We are proud to be able to continue to make real investments in local economic development and in the infrastructure of our county assets.”

The Bond Buyer newspaper, the premier newspaper for municipal finance professionals, bond issuers, government officials and investors, recently featured Cuyahoga County’s upcoming sale of $101.9 million in general obligation bonds in an online story.