Once a year I review the assessment given to Middletown and most other cities in Ohio. Below is the reference given to the bonds associated with the funding of the AKS project.
For years the line has been given the city is going broke. On the contrary, residents are being misled the sky is falling, how high pension liability to be, no funds for streets, and new levies are coming to Don't buy into the tax hype the city needs more cash. It could use some,
but that should be by income creation, and while there is plenty of
room to cut at the Abbey, they have more than enough cash-flow to
sustain the services at 1.75% rate. Otherwise, the Moody rate would be
far below the excellent rating category the city sits presently.
Revenue
is not a problem in city hall, its just the unwise manner it is spent
and disregard for servicing the neighborhoods effectively, that have
kept so many hand-cuffed for years in a declining property market.
Help unfortunately, is not on the way.
Rating Action: Moody's assigns A1 to City of Middletown, OH's $2.0M Special Obligation (Nontax Rev.) Bonds, Ser. 2015B
Global Credit Research - 12 May 2015
Aa3 rating maintained on $34.1M of outstanding GOLT debt
New York, May 12, 2015 --
Moody's Rating
Issue: Special Obligation (Nontax Revenue) Industrial Development
Revenue Bonds (Federally Taxable) Series 2015B; Rating: A1;
Sale Amount: $2,000,000; Expected Sale Date:
05-25-2015; Rating Description: Revenue:
Other
Opinion
Moody's Investors Service has assigned an A1 rating to the City of Middletown's
(OH) $2.0 million Special Obligation (Nontax Revenue) Industrial
Development Revenue Bonds, Series 2015B (AK Steel Research and Innovation
Center Project). Moody's maintains the Aa3 rating on the city's
$34.1 million of outstanding long-term general obligation
limited tax (GOLT) bonds.
SUMMARY RATINGS RATIONALE
The A1 rating reflects satisfactory legal provisions and the very strong
debt service coverage of pledged non-tax revenues. The A1
rating is notched once off the city's Aa3 GOLT rating due to the more
limited nature of the pledged revenues, which consist of certain
nontax revenue collected within the city's General Fund.
The Aa3 GOLT rating incorporates the city's moderate tax base size,
favorable location along the I-75 corridor between Dayton (Aa2
stable) and Cincinnati (Aa2 negative), and a satisfactory financial
profile despite multiple years of operational imbalance and use of General
Fund reserves. The rating also incorporates a strong financial
management team, below average income indices, and above average
adjusted net pension liability.
OUTLOOK
Outlooks are usually not assigned to local government credits with this
amount of debt outstanding.
WHAT COULD MAKE THE RATING GO UP
- Increased diversification of operating revenues that reduces
dependence on an economically sensitive income tax revenue stream
- Improvement in resident wealth indices
- Sustained growth in the city's tax base
WHAT COULD MAKE THE RATING GO DOWN
- Material declines in General Fund financial reserves and/or economically
sensitive revenues
- Ongoing deterioration of the city's tax base and/or demographic
profile
OBLIGOR PROFILE
The City of Middletown is located in Butler and Warren Counties in southwestern
Ohio, approximately 25 miles south of the City of Dayton and 39
miles north of the City of Cincinnati. It was incorporated as a
municipality in 1837.
LEGAL SECURITY
The Series 2015B bonds are special obligations of the city that are expected
to be payable from project revenues, but debt service is ultimately
secured by the city's nontax revenue pledge.
USE OF PROCEEDS
The bonds are being issued for the purpose of financing the acquisition
of property for the development and construction of a research and development
facility for AK Steel.
PRINCIPAL METHODOLOGY
The principal methodology used in this rating was US Local Government
General Obligation Debt published in January 2014. Please see the
Credit Policy page on www.moodys.com for a copy of this
methodology.
REGULATORY DISCLOSURES
For ratings issued on a program, series or category/class of debt,
this announcement provides certain regulatory disclosures in relation
to each rating of a subsequently issued bond or note of the same series
or category/class of debt or pursuant to a program for which the ratings
are derived exclusively from existing ratings in accordance with Moody's
rating practices. For ratings issued on a support provider,
this announcement provides certain regulatory disclosures in relation
to the rating action on the support provider and in relation to each particular
rating action for securities that derive their credit ratings from the
support provider's credit rating. For provisional ratings,
this announcement provides certain regulatory disclosures in relation
to the provisional rating assigned, and in relation to a definitive
rating that may be assigned subsequent to the final issuance of the debt,
in each case where the transaction structure and terms have not changed
prior to the assignment of the definitive rating in a manner that would
have affected the rating. For further information please see the
ratings tab on the issuer/entity page for the respective issuer on www.moodys.com.
Regulatory disclosures contained in this press release apply to the credit
rating and, if applicable, the related rating outlook or rating
review.
Please see www.moodys.com for any updates on changes to
the lead rating analyst and to the Moody's legal entity that has issued
the rating.
Please see the ratings tab on the issuer/entity page on www.moodys.com
for additional regulatory disclosures for each credit rating.
Mark Gregory Lazarus
Analyst
Public Finance Group
Moody's Investors Service, Inc.
100 N Riverside Plaza
Suite 2220
Chicago, IL 60606
U.S.A.
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653
Genevieve K Nolan
Vice President - Senior Analyst
Public Finance Group
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653protect those 'aged" citizens that weigh on the city. On the contrary, the average age of the Middletown resident is 38. Simply put, the taxpayer is paying too much tax in Middletown and Butler Cty. A bit surprising as one will read, is Middletown is well equipped financially, to meet its forward pension liability.
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'An appeaser is one who feeds a crocodile, hoping it will eat him last.' - Winston Churchill
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