Amid a year dominated by how to address funding our 10-year capital improvements program while maintaining current service levels, we just received the great news that our Triple-A financial rating has once again been confirmed by two ratings agencies.
For the seventh consecutive year, Moody's Investors Service has rated the Upper Arlington Aaa and Standard & Poor's has reaffirmed the city's AAA status.
While great news for UA, both agencies acknowledge our vulnerabilities -- the loss of the estate tax, an increased reliance on income tax, and limited growth in the city's assessed valuation, etc. -- albeit with the caveat that we have historically been able to meet our financial challenges head-on and are clearly taking the steps necessary to adapt to our new fiscal realities.
Speaking to the findings of the Citizen Financial Review Task Force and the increasing likelihood that there will be a request for voters to approve an increase in the city's income tax rate from 2 percent to 2.5 percent, the Standard & Poor's report states "... if the city were to fail to achieve an income tax increase or make other adjustments, resulting in the delay of capital improvements or weakened performance for a sustained period, we could lower the rating."
So while we continue to hold our position for now, the stakes are high for us as we decide how to address our infrastructure needs.
The Triple-A rating is the highest that can be attained and is considered the gold standard for government entities when selling bonds to finance projects.
As a result, our efforts to effectively manage the community's assets can now be further enhanced by our ability to secure exceptionally low interest rates and we plan to take advantage of our reaffirmed rating. In the near future, we will be issuing approximately $6.3 million of various purpose refunding bonds with the goal of reducing our interest payments on this existing debt.
To retain top ratings from two of the nation's finest rating agencies is an impressive achievement. We owe this milestone to the strong leadership and vision of both our present-day and previous city councils.
I also applaud our Finance and Administrative Services Department. Under the strong leadership of Director Cathe Armstrong, the department performs its vital organizational functions to the highest standards of integrity and competency.
Theodore J. Staton is Upper Arlington's city manager.