Moody's reaffirms Gahanna's Aa1 bond rating
Security rating agency Moody's Investor Services Inc. has reaffirmed the city of Gahanna's Aa1 bond rating, the second-highest credit rating issued by Moody's.
During the April 1 Gahanna City Council meeting, council president Stephen Renner commended finance director Jennifer Teal and assistant city administrator Brandi Braun for their efforts in the process.
"When the investors came to investigate our city, I was very impressed with the knowledge you had," Renner said. "You represented us well."
The highest Moody's rating is Aaa. Numeric values are appended to generic categories from Aa through Caa, with values of 1 indicating that a city's obligation ranks in the higher end of its generic category and values of 3 indicating the lower end.
Gahanna's Aa1 is directly behind Aaa.
Teal told ThisWeek the city learned of the reaffirmed rating March 27.
"It's wonderful news for the city," she said.
Teal said Gahanna received the Aa1 rating in 2007, and she anticipated the city would retain that rating, thanks to the creation of a debt policy and other management tools the city has established.
The Aa1 rating is indicative of "the city's moderately sized tax base, favorably located in the Columbus metropolitan area; stable financial operations characterized by ample reserves; above-average socioeconomic indices; and average debt burden," according to Moody's.
The city was required to undergo a credit review and rating as part of a bond refinancing process that is under way.
The city is refinancing bonds that were issued in 2005 to take advantage of lower interest rates.
When investors consider buying or selling bonds, they check ratings from major security rating agencies like Moody's to assess the risk. Standard & Poor's is the other major ratings agency.
Teal estimated the savings over the life of the refunded bonds would be about $1 million, providing the city an annual savings of $60,000 to $65,000.
"Gahanna citizens should be very proud of their city's rating," Mayor Becky Stinchcomb said in a press release. "An Aa1 rating is indicative of strong management and responsible fiscal practices. I am proud that we have been able to maintain this excellent rating through the economic downturn."
In other council action, an encroachment easement for Mill Street was unanimously approved for Lew Griffin's LGI Building LLC.
The renovation project has been stalled since late January, when Griffin was encouraged to consider other options for the building's facade that was designed with four structural pilasters encroaching 18 inches into the right of way.
Griffin stayed with his basic design but was able to reduce the encroachment to about 7 3/4 inches into the right of way.
Council member Ryan Jolley thanked Griffin for addressing concerns.
"I looked at the building, and I'm pleased what he came up with," he said.
Renner said he also visited the site.
"I was very pleased with what was happening," he said.
Given the compromise and willingness of Griffin, council member Brandon Wright said it has been a very positive experience, and he supports the request.