Work will soon begin on the Union Centre Boulevard / I-75 interchange converting the old bridge deck into a ‘Divergent Double Diamond Interchange’. The purpose of this project is to better handle the present and future volume of traffic on and off the interstate as the Union Centre area continues to develop. The project cost is $17M and will be paid for by the Union Centre Blvd TIF district. Although the Township could pay cash for the project, we’ve decided the best course of action is to finance the bulk of the cost ($14M) with a municipal bond. A municipal bond is basically a loan with principal and interest payments. West Chester Township, like any borrower, has a “financial score” or rating that determines the interest rate on the loan. The higher the score, the better the interest rate!
To that end, on March 13, 2019 your West Chester Township Trustees, Fiscal Officer Bruce Jones, Administrator Larry Burks, WC Finance Director Ken Keim and Andy Brossart Municipal Advisor with Bradley Payne Advisors, traveled to Chicago to meet with Analysts at Moody’s Investor Services for the purpose of presenting the status of West Chester’s economic development initiatives, strategies, policies and financial management practices with the intention of getting their highest possible rating.
Moody’s Investors Service provides international financial research on bonds issued by commercial and government entities and ranks the creditworthiness of borrowers using a standardized ratings scale which measures expected investor loss in the event of default. Through their analysis, Moody’s assigns a ‘credit rating’ between Aaa (highest quality and lowest credit risk) to C (lowest quality, usually in default and low likelihood of recovering principal or interest). There are 21 ratings in all.
Once again, Moody’s Investors Service has issued Aaa bond rating for West Chester Township! West Chester was assigned the highest rating possible due to its large and increasingly diverse tax base driven by substantial economic development; healthy financial operations supported by strong operating reserves and dedicated voted levies for core services.
New York, March 21, 2019 — Moody’s Investors Service has assigned the Aaa rating to West Chester Township, OH’s $14 million Road Improvement General Obligation Limited Tax (GOLT) Bonds, Series 2019. Moody’s maintains the Aaa rating on the township’s outstanding GOLT bonds and the Aaa Issuer Rating, which we use as a reference point for the limited tax bond rating. Inclusive of the new bonds, the township will have $34.5 million of GOLT debt outstanding.
The Aaa issuer rating reflects the township’s large, diverse tax base near Cincinnati (Aa2 stable); healthy financial operations supported by exceptionally strong reserves; modest debt burden; and above average exposure to unfunded pension liabilities.
Having said all this, the bottom line is the 2.82% interest rate West Chester is getting on the bond. This amazingly low interest rate means that the bond interest payments may be ‘revenue neutral’ when compared to the +$34M Union Centre Blvd TIF fund balance investment return!
West Chester Township has developed fiscally responsible borrowing practices over the years and receiving the Aaa rating again is a credit to all of those who continue to work so diligently to identify efficiencies within our Township operation and to remain responsible stewards of taxpayer dollars.
Our positive business climate continues to benefit the community as a whole and local use of tax increment financing (TIF) to fund capital infrastructure improvements keeps West Chester competitive!