Standard & Poor's Corp. last week revised the outlook for Columbus to positive from stable, citing the city's diverse economy and strong debt and financial management.
The outlook change affects $1.58 billion of general obligation debt rated AA-plus and $27.3 million of bond anticipation notes rated SP-1-plus.
In last week's CreditWeek Municipal, Standard & Poor's said that the city's strong financial performance is reflected partly in its $18.6 million undesignated general fund balance on Dec. 31, 1993, which represented 6.3% of expenditures. A $7.5 million economic stabilization fund provides the city with greater financial flexibility, Standard & Poor's said.
The rating agency said that Columbus' debt burden is manageable, noting that the city earmarks 25% of annual income tax revenues to support debt service. The city has not levied a property tax for debt service since 1957.
Michael Forrester, a director at Standard & Poor's, said that the city could be in line to receive an AAA bond rating if the city's financial progress continues.
In May, Columbus became the first local government to provide its own liquidity support on a bond issue. Instead of seeking a letter of credit on $51.6 million adjustablerate sewerage system revenue refunding bonds, the city used its investment portfolio to provide liquidity.
