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updated: 4/11/2014 3:12 PM

Buffalo Grove hangs onto Aaa bond rating

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Moody's Investor Services has confirmed Buffalo Grove's Aaa bond rating for its existing general obligation debt.

Moody's was reviewing the village for a possible downgrade, but said the diversity of the community's tax base, solid fiscal management and a favorable debt profile overcame its "elevated" pension liabilities.

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Village officials, meanwhile, say the decision underscores their efforts to maintain a strong balance sheet with a conservative tax policy.

"The village has always been aggressive in managing debt and other liabilities," said Village President Jeff Braiman. "The decision by Moody's recognizes the strength of this community to weather a major economic storm."

In its opinion, Moody's cited the need for Buffalo Grove to continue building reserves and diversifying its tax base. In recent years the village has taken measures to eliminate operating deficits, including cutting positions, renegotiating service and commodity contracts and reorganizing the delivery of services.

More recently, the village has started consolidating its main customer service areas and launched online services.

Village Manager Dane Bragg and Finance Director Scott Anderson prepared and presented the review analysis to Moody's in March. The review team evaluated operating income and loss, debt profiles, pension liabilities and tax source reliability.

Moody's cited strength in all areas of Buffalo Grove's finances, except for "elevated but manageable pension liabilities."

Anderson said the village is making "slow but consistent progress in recovering from the 2008-2011 downturn."

The village was recently awarded the Government Finance Officers Association Certificate of Achievement for Excellence in Financial Reporting for 2012.

This certificate is the highest form of recognition for governmental accounting and financial reporting.

Moody's opinion, however, says the village faces a challenge from recent declines in property valuations.

It also warned that the Aaa rating could go down if the tax base weakens significantly, or if there are declines in economically sensitive revenues.

Substantial deterioration of cash reserves could also affect the rating, Moody's said.

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