MAYOR'S MESSAGE

Craig A. Stough 3/14/2008

"City's Bond Rating Affirmed"

Moody's Investors Service affirmed the City of Sylvania's previous Aa2 bond rating in a report issued March 11, 2008. The rating is one of the the highest available to a city of Sylvania's size, and confirms the financial strength of the City as viewed by the Moody's analysts. The excellent rating will result in lower interest rates continuing to be available for the City's debt.

The bond rating was issued in anticipation of a $7,850,000 tax exempt municipal bond sale planned for April. These bonds will finance the past three years of street and bridge improvement over the next 20 years. The last bond sale was in 2004, and recent street and bridge improvements have been financed with short term notes in anticipation of this bond sale, which is being timed to coincide with low market interest rates.

The analysts at Moody's issued the excellent bond rating noting the Aa2 rating is based on Sylvania's sound financial operations, flexibility and reserves. Moody's believes the City's debt profile will remain manageable due to a modest debt burden, average principal amortization and modest near-term borrowing plans. The Aa2 bond rating places our debt in the top 20% of tax-exempt debt in the country.

This is the fourth time I have participated in a bond rating process with Moody's Investors Service. The first two times, I had to travel to New York City, the last time in February, 2002. As a result of 9/11, Moody's opened a field office in Chicago for our region of the country, where I traveled in March, 2004. This year the bond presentation to analysts in New York was made over a telephone conference call from the Sylvania Mayor's Office without traveling to either New York or Chicago.

Following the bond sale next month, the City of Sylvania will have about $19,000,000 in general obligation long-term debt outstanding. This is well below the legal limit permitted the City, and is below the average for a city of Sylvania's size. Additional bond sales will be considered in the future for continuing infrastructure improvements, but if interest rates are high, capital improvement funds may be used in lieu of selling debt.