A representative of Robert Baird Company investment firm told Grandview Heights City Council Nov. 15 the city would likely earn a high quality credit rating of Aa2 if it chose to pursue a bond offering to help pay for capital improvement projects.

A representative of Robert Baird Company investment firm told Grandview Heights City Council Nov. 15 the city would likely earn a high quality credit rating of Aa2 if it chose to pursue a bond offering to help pay for capital improvement projects.

Brian Cooper, a vice president with Robert Baird, presented an overview of the bond process as a follow-up to a discussion held earlier this year.

Nothing formal has been proposed as the city explores the potential option of using bonds.

If a city decides it wants to go through the bond market to fund certain projects, its ability to borrow would be set by assessed valuation, Cooper said.

The ability of a city to borrow using bonds is impacted heavily by its credit rating, Cooper said.

"The higher the credit rating, the lower your borrowing costs," he said. "It's like your personal credit rating."

Grandview, which currently does not have a bond rating, would have go through a process with a credit rating agency to establish one, Cooper said.

Looking at data regarding six Ohio communities with a Aa2 rating, Grandview compares "very well" with them, he said, but would need to develop a rating strategy to identify the city's strengths and indicate its credit worthiness.

"What they will look most at is the city's strength to manage and make difficult decisions," Cooper said.

A credit agency will consider such factors as whether there is an imbalance between the city's revenues and expenditures, what the balance is at the end of the year, if the balance is going down and why and what the city's plan is for the future, he said.

One of the difficulties the city would face if it considered financing projects using bonds is balancing "what we need versus what we can afford," council president Steve Reynolds said.

The city has a list of projects it would like to get done, but that list would need to be prioritized and matched to what is prudent, he said.

Reynolds asked Cooper if he has "a ballpark feeling" of what would be prudent for Grandview.

"I don't have a percentage or number for you," Cooper said. "You have the ability to borrow. The ability to repay rests on the city's ability to budget for that repayment."

A portion of the city's general fund would have to be set aside every year for debt service, he said.

A municipality can borrow certain amounts without voter approval and other amounts with voter approval, Cooper said.

"This truly is exploratory, but I don't see much chance" that the city would consider asking voters to approve a bond issue, council member Anthony Panzera said.

The next step in the process would be to begin meeting to come up with a strategy and determine what the city is trying to achieve, Cooper said.

"I'm available if you want to go further," he said.

The city should prioritize its desired projects to help determine if the bond option is feasible, council member Steve Gladman said.

One potential project is the proposed improvement of Pierce Field, he said.