The city of Morris has received an increased credit rating from Moody’s Investors Service, an accomplishment a financial representative called “phenomenal.”
Moody’s increased the city’s credit rating to a Aa2 rating, which is equivalent to Joliet’s rating and higher than the city of Chicago’s.
“It is just two steps behind the highest rating you can receive,” said Mayor Richard Kopczick after Monday’s city council meeting, where the new rating was announced.
“We are very proud of the fiscal position we find the city of Morris in today,” he continued.
The rating came when the city looked into refinancing its 2006 bonds for the construction of the east-side sewage treatment plant. With this, the city stands to save about $260,000 on interest.
The city council approved an ordinance to issue the refunding bonds and approved authorizing the mayor to enter an engagement letter with Chapman and Cutler, attorneys for their bond counsel.
Lynda Given of Chapman and Cutler said there was no new money associated with the refinancing.
“It’s like refinancing your mortgage to take advantage of lower interest rates,” she said.
John Vezzetti of Bernardi Securities Inc., municipal bond specialists, said the city’s ability to raise its credit rating during a recession is phenomenal. He explained to the council Moody’s said the city’s strengths included its location near Interstate 80 and being the county seat.
“The city’s financial position is expected to remain strong given its history of sound fiscal management and very strong reserves,” states Moody’s documentation.
Vezzetti said they would look into marketing the bonds by early next week.
In other financial business, the city ratified its participation in the state Fiscal Year 2013 Sales Tax Increment Distribution program.
The state matching program is for sales tax dollars generated in the Tax Increment Financing district. A TIF District freezes the assessed value of properties in the district. Any tax money generated from increases in value of those properties then goes into a special fund to be used to improve properties in the district.
In previous years, the city has usually participated in the matching program. Last year, it contributed about $359,000, and the state contributed about $559,000 to the TIF fund, which resulted in more than $900,000 going to the TIF fund.
This year, the city will have to contribute $1.3 million to get the states match of $1.7 million, resulting in $3 million dollars in the TIF fund.
The city budged for about $450,000 to contribute. Budget Officer John Enger and Kopczick are looking at the possibility of transferring the remaining $900,000 from the Water and Sewer Capital Fund to the General Fund and pay it back to the water and sewer fund over three years.
They are looking at different options, said Kopczick. Whatever is decided will go before the city council to approve the amendment of the budget.