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Moodys ups pair of ratings

Moody's Investors Service this week issued an upgrade to Lake Oswego's water fund debt, making it the second best debt rating for an Oregon municipality, next to the city of Portland. The upgrade is from Aa3 to Aa2.

Moody's reasons for the upgrade include low debt burden, 3 percent rate increases for the next two years and excellent financial management, according to Richard Seals, the city's finance director.

'The city's financial operations continue to be characterized by high reserve levels, strong fiscal policies, and practice of multi-year financial planning,' according to the Moody's rating update report.

The upgrade was issued in anticipation of next month's $5 million water revenue bond sale that will be used for improvements to the Clackamas River intake and water treatment plant facilities, and the refinancing of the existing $5 million of outstanding water revenue bonds from the 1999 bond sale. The refinancing is anticipated to save $150,000 on future interest costs.

Also this week, Moody's assigned the city's sewer fund the highest rating available for next month's bond issue of $12 million. The eventual cost of the sewer interceptor project will be about $100 million. The initial $12 million will go toward design, contractor procurement and preliminary materials procurement.

It is a short-term issue that the city expects to be refinanced next fall with the larger bond issue needed to start construction on the interceptor project. The issue received the highest rating of MIG-1.

Seals said that better credit ratings will mean lower interest rates for the city.