Bellevue Mayor Charlie Cleves was recently reading the Kentucky League of Cities (KLC) newsletter when an article caught his eye.

“I saw that a city in Kentucky had received a very low and attractive interest rate of 1.93 percent on a 20-year fixed rate loan,” Mayor Cleves said. “I don’t remember ever seeing a city receiving an interest rate that low when borrowing money. I immediately began wondering if Bellevue could get a rate that low to refinance about $3 million in bond debt.”

Bellevue City Manager Frank Warnock reached out to RSA Advisors, a Lexington-based firm that advises cities and structures financial transactions for local governments. RSA, which has worked with the City of Bellevue in the past, had advised the city that Mayor Cleves learned about in the KLC newsletter.

After meeting with RSA Managing Director Joe Lakofka, assembling financial information and then presenting to Standard & Poor’s (S&P) a national credit rating agency, Bellevue received a 1.88 percent fixed interest rate on a 20-year bond issue that is being used to finance $3.1 million in debt.

“When I first arrived in Bellevue almost two years ago, we learned that we had to refinance $2.5 million in debt that was based on a two-year interest payment only obligation,” said Warnock. “The Mayor and I agreed that interest only debt was not in the long-term best interest of the city.”

“I never thought I would see an interest rate below 2 percent,” Mayor Cleves said. “You are going to see a lot of other cities take a look at refinancing with interest rates like this.”

Funds from the refinancing will be used to pay off the debt on riverfront real estate the city had acquired and to finance a portion of the retaining wall project to mitigate hillside erosion on North Sherry Lane, South Sherry lane and upper Bonnie Leslie Avenue.

S&P assigned an AA- long-term bond rating to the city. Due to COVID-19 revenue losses, some cities have seen their bond rating’s decrease. But Bellevue has maintained its bond rating due a strong local economy and effective financial management of the city’s budget, S&P said in rating report.

“We expect that Bellevue’s very strong reserves and track record of operating surpluses will help the city maintain a strong financial position despite potential revenue weakness in the wake of the COVID-19 outbreak and related economic downtown,” S&P said. “Although Bellevue has not been spared from the virus, it continues to attract businesses and benefits from its participation in the Greater Cincinnati metropolitan statistical area (MSA) economy. In addition, to date, revenues have exceeded expenditures.”