The Gazette covers City Hall, now a flood-damaged icon on May's Island in the Cedar River

Streak intact: City Hall secures top Aaa bond rating again

In City Hall on April 4, 2008 at 6:50 pm

 Moody’s Investors Service has once again given the city of Cedar Rapids the service’s top bond rating,  Aaa, as the city prepares to sell a new round of $24.23 million in bond debt to support city infrastructure projects.The bond sale is April 9.

A top bond rating – which the city has secured 37 consecutive times over more than 30 years and which the city prides itself on — is beneficial because it helps secure a lower interest rate on the new debt.

The city of Cedar Rapids made a presentation to a Moody’s analyst via conference call on Monday.

In its rating decision this week, Moody’s states that it also has affirmed the city’s Aaa bond rating for the city’s total debt, which will stand at $275.6 million after the April sale, the report states. The city is roughly at 60 percent of its bonding capacity, according to city figures.

In its report to potential buyers of Cedar Rapids’ bonds on April 9, Moody’s reports that the city’s Aaa bond rating is based on the city’s “substantial, stable economy” and the city government’s “strong financial operations characterized by healthy reserves” and its “average debt burden” with “rapid” debt payment.

Additionally, Moody’s states that it expects the city’s “substantial” tax base of $8.2 billion to continue to experience “steady growth.”

The report notes that the city has “substantial” employers, including Rockwell Collins Inc. and Archer Daniels Midland, adding that the city’s tax base has grown “moderately,” averaging 4.7 percent annual growth over the past five years after state-mandated rollbacks.

Also, foreclosure rates as reported by the city remain “below historical averages, and should remain below regional levels.” Per capita income and median family income in Cedar Rapids are 114.8 percent and 113.1 percent of the state averages.

City government, the report goes on, exhibits conservative budgeting, strong oversight and sound reserves.

The city completed the fiscal year ending June 30, 2007 with a general fund surplus of $3 million, bringing the city’s total general fund balance to $32.7 million or 36.7 percent of the city’s general fund revenues, the report states.

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