Brecksville (City of) OH -- Moody's assigns Aa1 to Brecksville, OH's GOLT bonds

Rating Action: Moody's assigns Aa1 to Brecksville, OH's GOLT bondsGlobal Credit Research - 18 Jan 2022New York, January 18, 2022 -- Moody's Investors Service has assigned a Aa1 rating to the city of Brecksville, OH's $11.2 million General Obligation (Limited Tax) Various Purpose Improvement Bonds, Series 2022. Moody's maintains the Aa1 issuer rating and a Aa1 rating on the city's outstanding general obligation limited tax (GOLT) debt. Following the sale, the city will have $31 million in GOLT debt.The issuer rating represents Moody's hypothetical assessment of debt supported by a general obligation unlimited tax (GOULT) pledge. The city does not currently have any outstanding debt supported by a GOULT pledge. The pledge supporting the outstanding GOLT debt is considered limited tax based on the statutorily imposed limit of ten-mills on the ad valorem property taxes pledged.RATINGS RATIONALEThe Aa1 issuer rating reflects the city's strong financial position resulting from growing income tax revenue and well-managed financial operations. Additionally factored into the rating is the city's moderately-sized tax base and growing local economy south of Cleveland (A1 stable) with strong median family income and full value per capita, though metrics trail higher rated entities in the sector. The debt burden is moderate while pension liabilities are somewhat elevated with exposure to two underfunded state cost sharing pension plans.The GOLT debt is rated Aa1, the same level as the issuer rating, because of the city's full faith and credit pledge to pay debt service.RATING OUTLOOKMoody's does not typically assign outlooks to local governments with this amount of debt.FACTORS THAT COULD LEAD TO AN UPGRADE OF THE RATING- Expansion of the local economy and income tax base- Moderation of the debt and pension burdensFACTORS THAT COULD LEAD TO A DOWNGRADE OF THE RATING- Deterioration of operating reserves or liquidity- Material growth in the city's debt or pension burdenLEGAL SECURITYThe city's GOLT debt is secured by a full faith and credit pledge, and payable from ad valorem taxes levied within the state's 10-mill limitation.USE OF PROCEEDSThe Series 2022 bonds will be used to retire the city's Various Purpose Improvement Notes, Series 2021A and Series 2021B and set to mature February 24, 2022. The notes were originally issued to construct an athletic fieldhouse in connection with the Brecksville-Broadview Heights City School District (Aa2) and for roadway construction and improvement related to developments in the city.PROFILEBrecksville is located in Cuyahoga County (Aa2 stable), about 12 miles south of Cleveland. The city provides public safety (police and fire), recreation, street maintenance, public health, economic development and other governmental services to about 13,600 residents.METHODOLOGYThe principal methodology used in this rating was US Local Government General Obligation Debt published in January 2021 and available at https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBM_1260094. Alternatively, please see the Rating Methodologies page on www.moodys.com for a copy of this methodology.REGULATORY DISCLOSURESFor further specification of Moody's key rating assumptions and sensitivity analysis, see the sections Methodology Assumptions and Sensitivity to Assumptions in the disclosure form. Moody's Rating Symbols and Definitions can be found at: https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_79004.For ratings issued on a program, series, category/class of debt or security this announcement provides certain regulatory disclosures in relation to each rating of a subsequently issued bond or note of the same series, category/class of debt, security or pursuant to a program for which the ratings are derived exclusively from existing ratings in accordance with Moody's rating practices. For ratings issued on a support provider, this announcement provides certain regulatory disclosures in relation to the credit rating action on the support provider and in relation to each particular credit rating action for securities that derive their credit ratings from the support provider's credit rating. For provisional ratings, this announcement provides certain regulatory disclosures in relation to the provisional rating assigned, and in relation to a definitive rating that may be assigned subsequent to the final issuance of the debt, in each case where the transaction structure and terms have not changed prior to the assignment of the definitive rating in a manner that would have affected the rating. 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