City bond rating improves, auditor says

The city of Lorain’s municipal credit score has gotten better, said Auditor Karen Shawver.

The city of Lorain’s municipal credit score has gotten better, said Auditor Karen Shawver.

On Nov. 18, Shawver announced Moody’s Investors Service has upgraded the city’s bond rating to Baa1 with stable outlook as of Nov. 2.

The rating upgrade will have a significant, positive impact on Lorain’s general obligation refunding bond issuance and the stable outlook reflects the city’s sustained progress toward building operating fund balance to a more satisfactory level, according to the city auditor’s office.

Shawver noted the change comes as Lorain and communities across the nation are dealing with economic challenges created by the novel coronavirus pandemic.

“This is very exciting for Lorain,” she said. “This is another positive sign for the city of Lorain and illustrates that Lorain has showed progress and financial stability, even during this pandemic.”

Moody’s credit opinion stated: “The credit profile of the City of Lorain, OH (Baa1 stable) has strengthened over the past several years through improvement in operating fund balance and liquidity. The city’s improved fiscal health works to balance its notable economic challenges. Lorain has recorded three consecutive audited general fund surpluses since fiscal 2017.

“The upgrade of the city’s issuer rating to Baa1 is based on its recent positive financial performance. The strengthening of reserves better positions the city to absorb revenue pressure on its income tax base caused by the coronavirus pandemic or other future economic stressors.”

The rating upgrade is the result of prudent fiscal management, Shawver said.

“With continued fiscal responsibility and the further bolstering of our operating fund balance, the city could receive an additional upgrade of our rating in the future,” she said. “This is also evidence of the importance of working together with determination and diligence in order to reach our economic goals.”