MAYOR'S MESSAGE

Craig A. Stough 4/21/04

"City Sells Street Improvement Bonds"

The City of Sylvania recently sold $5,300,000 worth of tax exempt municipal bonds for street improvements. This bond sale was timed to coincide with a very favorable climate for issuing long term debt, and the City received a low interest rate of 4.11%, reducing the interest expense. The sale was held over the internet with ten bids received. The buyer offering the lowest interest rate was the First Tennessee National Bank.

These bonds will finance the first three years of concrete street replacements in a six year residential street improvement program began last year. This six year program of residential street improvements is being made with no assessments to property owners. While the City is financing asphalt street milling and resurfacing projects out of capital funds, the concrete street replacements are being financed over 20 years.

Last year's improvements were financed with short term notes and the City anticipated selling bonds next year. However, with interest rates low and projected to begin increasing, City Finance Director John Plock recommended the bond sale take place this spring. A second bond sale is anticipated in three or four years to finance the second three year segment of concrete street improvements beginning in 2006.

Interest rates for municipal bonds are tied to bond ratings determined by Moody's Investment Service. During March, Mr. Plock and I traveled to Chicago for a presentation to Moody's of the city's finances and economic health, in hopes of maintaining the City's already good bond rating for this large bond sale. In the past, these presentations were made in New York, but following 9/11, Moody's has opened a field office in Chicago for our region of the country.

Fortunately, the City is financially strong and the community is economically healthy. As a result, Moody's Investment Service continued the City's bond rating at Aa2, placing our debt in the top 20% of tax-exempt debt in the country, and the highest in Ohio for a city our size.

My thanks to Finance Director John Plock for his sound financial leadership of the City and his excellent preparation for our presentation to Moody's Investment Service. Following this sale, the City of Sylvania will have a total of $14,749,100 in outstanding bonded debt. This is well below the legal limit permitted the City, and is below average for a city of Sylvania's size.