Warren’s good news: Bond rating rises

By ED RUNYAN

runyan@vindy.com

WARREN

The city finally has received a positive indicator that its economy is on the rebound.

Last month, Warren was notified that its bond rating from Moody’s Investors Service had risen three spots to A1.

It previously was at Baa1.

The rating comes three months after Warren steelmaker Severstal started bringing back many of its 1,200 laid-off workers and GM Lordstown began its plan to build the Chevrolet Cruze.

Auditor David Griffing says it is the first time Warren’s bond rating — which determines the interest rate the city would have to pay to borrow money — has been in the A range in his 28 years with the city.

Griffing said getting to A1, the third-highest level, would allow a much larger pool of investors to buy municipal bonds if Warren would choose to issue them.

Pension funds, trust funds and the like typically are unable to invest in bonds that are below the A rating, Griffing said.

Griffing and Mayor Michael O’Brien said they won’t comment on whether the city has any intentions of raising money through a bond sale at this time.

But because a city’s bond rating is a lot like a person’s credit rating, it can have other positive effects, such as helping a city get an advantageous lease agreement, Griffing said.

The auditor added he believes the city’s bond rating climbed so significantly because the city administration cut costs throughout 2009, including the layoff Jan. 1, 2009, of 20 police officers, 15 firefighters (including four unfilled positions) and nine other workers.

The improvement in area employment also plays a role, Griffing and O’Brien said.

“Despite the challenges of one of the toughest economic times in a generation, we’ve still been able to manage our debt and adjust our expenses toward the delivery of services,” O’Brien said.

It’s been two years’ worth of extraordinary bad economic indicators for the city and Trumbull County — consecutive months’ worth of chart-topping unemployment for Warren in 2009 and the loss of 8.6 percent of Trumbull County’s jobs between December 2008 and December 2009 — highest among the nation’s 334 largest counties.