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New York-based Fitch Ratings has affirmed Beachwood’s highest bond rating of AAA and cited the city’s “strong financial management”.
Fitch on November 7th affirmed its coveted AAA rating for two existing City of Beachwood bond issues. Fitch also determined that the rating outlook for Beachwood is stable.
Higher bond ratings mean costs savings for the city, because the higher the rating, the more secure the investment is deemed to be for investors. More secure investments carry lower interest rates, thus reducing the costs to the city.
Fitch describes its AAA rating as its “highest credit quality.”
“They (AAA rating) are assigned only in cases of exceptionally strong capacity for payment of financial commitments,” according to Fitch.
Fitch’s accompanying economic review of the city offers up numerous, positive descriptions of Beachwood’s fiscal management and condition.
Mayor Merle Gorden said the rating is a gratifying endorsement of an efficiently run city.
“Fitch is a credible, objective third party that closely examines a bond issuers financials,” Mayor Gorden said. “To have them come back and award us their highest bond rating is a testament to how professionally and well we run the city from a financial standpoint.”
Fitch noted that “the city’s broad economic base is anchored by the Cleveland Clinic Foundation, which ranks among top taxpayers and is the city’s single largest employer. Planned expansion at the Cleveland Clinic Foundation will largely offset the recent closure of the Bank of America facility located in the city. In February 2013 the 600,000 square foot Eaton Corp. headquarters opened, adding approximately 700 new jobs to the city with potentially more in future years.”
The report also noted that Beachwood’s per capita income is approximately double the average for the state of Ohio. Fitch also recognized the City’s conservative budgeting practices which have resulted in net operating surpluses.