Linn County retains top Aaa bond rating

CEDAR RAPIDS - Linn County has retained its top Aaa bond rating from Moody's Investors Service in a year when the city of Cedar Rapids has seen its Aaa bond rating slip one grade to Aa1 for the first time in some 40 years.

The county secured the rating as part of the Board of Supervisors' approval this week of a sale of $1.75 million in general obligation bonds to fund the construction of new maintenance facilities at Morgan Creek Park and Pinicon Ridge Park.

In the Moody's report, the credit-rating agency pointed to Linn County's 'low direct debt burden with no near-term borrowing planned” as one justification for the county's retention of its Aaa bond rating.

With the new bond sale, the county will have $20.3 million in outstanding debt, a small fraction of the county's bonding capacity of some $900 million, Steve Tucker, the county's finance director, said this week.

Tucker said the county's outstanding debt has provided funds for renovations to county buildings damaged in the 2008 flood, the construction of the new Juvenile Justice Center and Elections Depot and support for the joint communications system.

The Moody's report also stated that Linn County enjoys a large and growing tax base and that Linn County government has rebuilt its financial reserves following declines due to flood-related spending.

Tucker said only Linn County and Polk County among counties in Iowa have an Aaa bond rating from Moody's.

The only Iowa cities with Aaa bond ratings from Moody's are Iowa City and West Des Moines.

Moody's cited the city of Cedar Rapids' purchase and renovation of what had been the financially troubled hotel in the downtown as one reason for lowering the city's rating.

Cedar Rapids city officials also have said that Moody's has changed its ratings methodology, making it more difficult for small and moderate-sized cities to secure top bond ratings.

This year alone Ames (now Aa1), Des Moines, Dubuque, Bettendorf, Sioux City (all now Aa2) and Davenport (now Aa3) are among other Iowa cities that have seen their bond ratings slip a notch.